On 22 February, 2017 – Global stocks were mixed in lackluster trading

Investors in Asia and Europe were waiting for the FOMC minutes which were released in the US afternoon.
United States
Stocks showed a lack of direction throughout the lackluster trading session Wednesday before ending the day little changed after the release of the latest FOMC minutes. Despite the choppy trading on the day, the Dow Jones industrials still managed to climb to another new record closing high for the ninth day in a row — the longest record setting run in three decades. The Dow added 0.2 percent while both the S&P and Nasdaq slipped 0.1 percent.
Garmin advanced after the GPS and fitness device maker reported fourth quarter results that exceeded estimates. Toll Brothers posted a significant gain after reporting better than expected first quarter results. Texas Roadhouse retreated after the restaurant chain reported weaker than expected fourth quarter results. DuPont was higher as the company is expected to win antitrust approval from European Union regulators for its $130 billion merger with Dow Chemical. Alphabet was upgraded one notch to double-A plus by credit rating agency S&P Global putting the owner of the Google search engine and Android operating system a single notch below the highest triple-A opinion. Analysts with S&P said the move reflected the company’s dominance in both desktop and mobile phone advertising markets and its conservative financial strategies. S&P maintained a stable outlook on the company.
The Federal Reserve published minutes of its latest FOMC meeting held on January 31 and February 1. At that meeting, the committee left its fed funds rate range at 0.5 percent to 0.75 percent. According to the minutes, “many participants” would like to increase fed funds interest rate “fairly soon” if the economy keeps growing. The minutes said the 10 Fed officials who vote on monetary policy remained committed to a policy of gradual rate increases because they continued to see balanced risks of faster and slower growth.
The minutes said that the Trump administration’s economic plans have injected “considerable uncertainty” into forecasting economic growth. But Fed officials have emphasized that they do not want to change their plans in anticipation of potential changes in fiscal policy. They will wait to see what happens. Moreover, the minutes noted that the Fed sees the near-term risks as “roughly balanced.”
The Fed also announced that Fed officials are now prohibited from speaking about monetary policy for 10 days before a policy-making meeting rather than one week. The Fed also said it would expand the information provided with its quarterly economic forecasts. The information will include an illustration of the uncertainty surrounding the projections also known as fan charts.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$3.45 to US$1,236.65. Copper futures were down 0.4 percent to US$2.75. WTI spot crude was down 78 US cents to US$53.57. Dated Brent spot crude was down 84 US cents to US$55.82. The US dollar was up against the pound and the Canadian dollar. The currency declined against the yen, euro and the Australian dollar. The currency was virtually unchanged against the Swiss franc. The Dollar Index was down 0.2 percent. The yield on US Treasury 30 year bond was down 1 basis point to 3.03 percent while the yield on the 10 year note was down 2 basis points to 2.41 percent.
Europe
Stock indices were mixed Wednesday. Initially the markets rallied thanks to German sentiment data and some positive corporate earnings reports. However, investors became cautious as they waited for the minutes of the latest FOMC meeting which were released after markets here were closed for the day. The FTSE was up 0.4 percent, the CAC edged up 0.1 percent, the DAX gained 0.3 percent and the SMI was 0.2 percent higher.
ThyssenKrupp advanced after it announced that it has reached agreement with Ternium, a Latin American steel producer, on the sale of the CSA Siderúrgica do Atlântico in Brazil. RWE retreated even though it cancelled its dividend for the second successive year. Fresenius advanced after it reported a 6 percent increase in fourth quarter net income. Bayer declined after its net profit for the fourth quarter tumbled 26 percent from a year ago. Airbus Group slid after reporting a 66 percent drop in full-year net profit mainly because of a charge on its troubled A400M military aircraft program. Hotel group Accor was lower after it posted muted growth in revenue for 2016.
Barratt Developments increased after reporting pretax profit of £321.0 million for the half year ended December 31, 2016 compared with £295.0 million in the same period a year ago. Lloyds Banking Group was higher after the lender posted its biggest annual profits in a decade. Unilever advanced after the company announced that it will conduct a comprehensive review of its operations in an effort to increase shareholder value. The news follows the announcement from Kraft Heinz over the weekend that it had withdrawn its offer to acquire the company. Anglo American, BHP Billiton and Rio Tinto retreated.
Fourth quarter UK gross domestic product was revised upward to quarterly growth of 0.7 percent from the initial estimate of 0.6 percent. On the year, GDP growth was revised to 2.2 percent from 2.0 percent. The final estimate for the January harmonized index of consumer prices in the Eurozone was up 1.8 percent on the year after increasing 1.1 percent in December. The February German Ifo survey indicated that business confidence was upbeat. The business climate index rose to 111.0 from a revised 109.9 in January. Both the current conditions and business expectations components were higher.
Asia Pacific
Asian stock markets were mostly higher Wednesday in somewhat subdued trading as investors waited for the release of the latest FOMC minutes later in the global market day. Traders were hopeful that they will provide insight on the probability of a March interest rate increase.
The Shanghai Composite was up 0.2 percent. January data indicated that China’s housing market continued to cool — a welcome sign for those worried about a generalized bubble developing in the market. The Hang Seng added 1.0 percent after Financial Secretary Paul Chan announced measures to support infrastructure and raise tax allowances.
The Nikkei was virtually unchanged (down 1.57 points) while the Topix inched up 0.1 percent. Toshiba shares jumped on a Nikkei report that the company has asked potential bidders for its memory chip business to peg the operations’ value at ¥2 trillion or more.
The S&P/ASX was up 0.2 percent while the All Ordinaries added 0.3 percent. The gains were recorded in spite of mixed corporate earnings and weak data for wage growth and construction activity. Commonwealth shares were lower after going ex-dividend. The other three banks advanced. BHP Billiton retreated after the mining giant warned of heightened economic uncertainty in the near term. Fortescue Metals Group declined even though the company posted a big jump in first-half net profit thanks to a massive rally in iron ore prices.
The Kospi was 0.2 percent higher on increased buying by foreign investors. The Sensex was up 0.4 percent.
Looking Forward
Germany posts revised fourth quarter gross domestic product. Italy releases January retail sales. In the US, December FHFA house price index and weekly jobless claims, money supply and fed balance sheet will be released.
Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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