On 03 July, 2017 – Most global stock indices advanced along with the US dollar
European markets rallied as energy, mining and banking shares advanced.
United States
US stocks were mixed Monday. The Dow Jones industrials and the S&P advanced 0.6 percent and 0.2 percent while the Nasdaq retreated 0.5 percent. Trading volume was light due to the abbreviated trading sessions for both bonds and stocks ahead of the Independence Day holiday on Tuesday.
Economic data were mixed with the June ISM manufacturing survey showing an acceleration in the rate of growth. The ISM said its purchasing managers’ index climbed to 57.8 from 54.9 in May. However May construction spending was flat — a drop in private construction spending offset a jump in public construction outlays.
Energy, trucking and financial stocks advanced but gold, semiconductor and software stocks were weak. Goldman Sachs Group and J.P. Morgan Chase rallied. Exxon Mobil and Chevron gained thanks to higher prices for both Brent and US crude. Ford and General Motors advanced as vehicle sales figures for June showed retail sales to consumers were relatively stable at the U.S. automakers.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$13.00 to US$1,229.25. Copper futures were down 0.7 percent to US$2.69. WTI spot crude was up 72 US cents to US$46.76. Dated Brent spot crude was up 61 US cents to US$49.38. The US dollar was up against all of its major counterparts including the yen, euro, pound, Swiss franc and the Canadian and Australian dollars. The Dollar Index was up 0.4 percent. The yield on US Treasury 30 year bond was up 4 basis points to 2.87 percent while the yield on the 10 year note was up 5 basis points to 2.35 percent.
Europe
European markets rallied on the first day of the new trading week. Energy stocks advanced with crude oil prices and better than expected Chinese manufacturing data provided a boost to mining shares. Bank stocks also advanced Monday, thanks to comments from both the European Central Bank and the Bank of England last week. The FTSE was up 0.9 percent, the CAC gained 1.5 percent, the DAX added 1.2 percent and the SMI was 1.2 percent higher.
ThyssenKrupp rallied after Handelsblatt reported that the German industrial group is likely to make a decision by the end of September on a Tata Steel merger. Danone gained after it entered into a binding agreement to sell Stonyfield, one of its U.S. dairy subsidiaries, to Lactalis for a purchase price of $875 million. Aggreko slipped after announcing it would acquire Younicos in a £40 million deal. Severn Trent was down after announcing the sale of its North American business. BP and Royal Dutch Shell were higher.
Plus500 gained after it announced it expects a strong performance in the first half of this year. ABB advanced in Zurich. The company has agreed to acquire the mission-critical communication business of the KEYMILE Group in order to strengthen its communication networks portfolio. Credit Suisse, UBS, Julius Baer and Partners Group advanced along with HSBC, Lloyds and Barclays. Insurance companies including Swiss Life, Swiss Re and Zurich rallied. Lonza and LafargeHolcim gained. Roche, Novartis and Nestlé also finished higher.
June manufacturing PMIs expanded at the fastest pace in over six years. The Eurozone manufacturing PMI rose to 57.4 in June from 57.0 in May. The June UK manufacturing sector expanded at the weakest pace in three months as increases in orders and production decelerated from May. The PMI slid to 54.3 from revised 56.3 in May.
Asia Pacific
Asian stocks were mixed Monday as investors waited for this week’s G20 summit, the Wednesday’s release of the FOMC minutes and Friday’s US employment.
The Shanghai Composite edged up 0.1 percent the Caixin manufacturing PMI showed a recovery in June thanks to slightly stronger increases in production and new orders. The Caixin PMI rose to 50.4 from 49.6 in May. The Hang Seng was also up 0.1 percent.
The Nikkei was up 0.1 percent and the Topix added 0.2 percent as upbeat business sentiment data helped offset the Liberal Democratic Party’s disastrous defeat in the Tokyo metropolitan assembly election. The yen erased gains after surging higher earlier in the day. The Bank of Japan’s Tankan survey for the second quarter was released. The large manufacturers’ index was plus 17, up from plus 12 in the previous quarter.
Both the S&P/ASX and All Ordinaries retreated 0.6 percent. The big four banks settled with modest losses after manufacturing and services PMI data from the Commonwealth Bank suggested that the economy continued to strengthen in June. Origin Energy and Beach Energy advanced thanks to higher oil prices.
The Kospi was 0.1 percent higher. The Sensex was up 1.0 percent after Moody’s on Sunday said the Goods and Services Tax (GST) regime, which came into force on July 1 after 17 years of debate, will be positive for India’s credit profile.
Looking forward
The Reserve Bank of Australia publishes its monetary policy decision. Retail sales for May will be released. The UK’s June construction PMI will be released. The Eurozone’s May producer price index will be released. All US markets are closed on July 4 for the Independence Day holiday.
Global Stock Markets
*Note — all releases are listed in local time.
Source: Fidelity
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