On 18 April, 2017 – Global stocks tumble

US stocks were lower on disappointing earnings.
United States
Stocks retreated Tuesday thanks in part to disappointing earnings from Goldman Sachs and Johnson & Johnson. Geopolitical tensions continued to fuel risk aversity. The Dow Jones industrials were down 0.6 percent, the S&P declined 0.3 percent and the Nasdaq slipped 0.1 percent. Healthcare and financials retreated.
Cardinal Health tumbled after a disappointing profit forecast overshadowed a deal to buy medical supplies businesses from Medtronic for $6.1 billion. Bank of America was lower although it reported a better-than-expected profit while Netflix was lower after reporting weaker-than-expected subscriber numbers in the first quarter.
IBM reported quarterly earnings after markets closed that beat expectations, but revenue fell short hurt by weak demand in its technology services business. Johnson & Johnson reported better than expected first quarter earnings but revenues came in below estimates. Negative sentiment was generated in reaction to quarterly results from Goldman Sachs. It reported weaker than expected first quarter earnings on disappointing trading revenue.
March housing starts dropped 6.8 percent to an annualized rate of 1.215 million. Both single family and multi-family homes were lower. Permits however, were up 3.6 percent to an annualized rate of 1.2760 million with single family homes down but multi-family higher. March industrial production was up 0.5 percent on the month. But manufacturing output slumped 0.4 percent.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$5.20 to US$1,278.95. Copper futures were down 2.6 percent to US$2.54. WTI spot crude was down 3 US cents to US$52.62. Dated Brent spot crude was down 28 US cents to US$55.08. The US dollar was down against the yen, euro, pound and Swiss franc. It advanced against the Canadian and the Australian dollars. The Dollar Index was down 0.8 percent. The yields on both the US Treasury 30 year bond and on the 10 year note were down 8 basis points to 2.83 percent and 2.17 percent respectively.
Europe
Stock indices declined as investors returned from a four day Easter holiday weekend. Continued uncertainty about the upcoming French election weighed on investor sentiment along with the persistent geopolitical concerns on the Korean peninsula. The FTSE dropped 2.5 percent, the CAC declined 1.6 percent, the DAX retreated 0.9 percent and the SMI was 1.2 percent lower.
On Tuesday, British Prime Minister Theresa May announced a snap general election for June 8. The announcement sparked a sharp rise in the value of the pound sterling which triggered an acceleration of the losses in the FTSE. In a surprise statement at 10 Downing Street, May said the UK needed stability, certainty and strong leadership after the June 2016 referendum. Her government, she claimed, has delivered that. May said an election is needed now because other parties are opposed to her government’s Brexit plans.
Hennes & Mauritz slipped in Stockholm. The retailer reported a 6 percent rise in sales during March compared to the same month last year. Credit Suisse declined. Mining companies Anglo American, Glencore, Antofagasta, Rio Tinto and BHP Billiton dropped as Chinese iron ore futures fell to three-month lows, with oversupply worries weighing on steel prices. BP retreated with the price of crude.
Asia Pacific
Asian stocks were mixed as oil prices held steady and positive Chinese house price data helped offset lingering geopolitical worries. The US dollar rebounded from a five-month low against the yen after US Treasury Secretary Steve Mnuchin stressed the longer term benefits of dollar strength.
The Shanghai Composite was down 0.8 percent. China home prices rose in the most cities since October, but price growth decelerated from February. The Hang Seng was down 1.4 percent as traders returned from the Easter long weekend. Tuesday’s slump marked a third day of losses for the Shanghai Composite amid concerns that tighter scrutiny by authorities could dent investor appetite for stocks. Over the weekend, China Securities Regulatory Commission Chairman Liu Shiyu asked stock exchanges to combat any activities that disturb market order. The remarks come as Chinese authorities seek to rein in excessive risk taking and curb speculation in the nation’s equity and property markets.
The Nikkei and Topix were up 0.3 percent and 0.4 percent respectively. Exporters Cannon, Panasonic and Mazda Motor advanced. Banks Mitsubishi UFJ Financial and Sumitomo Mitsui Financial also were higher. Maruha Nichiro tumbled on a Nikkei report that the company’s fiscal 2017 operating profit may decline 12 percent on purchasing costs.
The S&P/ASX was down 0.9 percent and the All Ordinaries was 1.0 percent lower as lower commodity prices weighed on resource stocks and the minutes from the Reserve Bank of Australia’s April monetary policy meeting revealed growing concerns around the housing market.
BHP Billiton, Rio Tinto and Fortescue Metals Group slumped after iron ore prices hit five-month lows overnight on fears of oversupply. South32 declined after abandoning its plan to buy a NSW coking coal mine. Gold miners including Newcrest and Regis Resources tumbled while energy majors Oil Search, Origin Energy and Santos also declined.
The Kospi edged up 0.1 percent as investors put aside concerns over rising geopolitical tensions and turned their focus to first-quarter earnings and the May presidential election. The Sensex reversed early gains to end 0.3 percent lower.
Looking Forward
The Eurozone posts final March harmonized index of consumer prices and February merchandise trade balance. In the US, weekly EIA petroleum status report will be released and the Federal Reserve will publish its Beige Book in preparation for its FOMC meeting on May 2 and 3.
Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

Fidelity disclaimer:

The objective of this page is to present users with objective news, information, data and guidance on personal finance topics drawn from a diverse collection of sources including affiliated and non-affiliated financial services publications. Content is not intended to provide tax, legal, insurance or investment advice and should not be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security or investment by any Fidelity entity or any third-party.

Jesmond Mizzi Financial Advisors Disclaimer:

This article, does not intend to give investment advice and the contents therein should not be construed as such. Jesmond Mizzi Financial Advisors Limited is licensed to conduct investment services by the MFSA and is a Member Firm of the Malta Stock Exchange. The directors or related parties, including the company, and their clients are likely to have an interest in securities mentioned in this article. For further information contact Jesmond Mizzi Financial Advisors Limited at 67, Level 3, South Street, Valletta, or on Tel: 21224410, or email [email protected]