Most stock indices advanced both for the day and week.
United States
US shares were little changed Friday in lackluster trading after the release of the September employment report. The Dow Jones was down 1.72 points, the S&P slipped 0.1 percent and the Nasdaq edged up 0.1 percent. For the week, the Dow was up 1.6 percent, the S&P gained 1.2 percent and the Nasdaq was 1.5 percent higher.
The September employment report held some surprises. Non-farm payroll employment lost 33,000 jobs after climbing by an upwardly revised 169,000 in August. The Labor Department said a sharp decline in employment in food services and drinking places and below-trend growth in some other industries likely reflected the impact of Hurricanes Harvey and Irma. Despite the unexpected drop in employment, the unemployment rate slipped to 4.2 percent from 4.4 percent in August — the lowest level since February 2001. The report also showed a notable acceleration in the pace of wage growth, as average hourly employee earnings were up by 2.9 percent on the year compared to 2.5 percent in August.
Walgreens Boots Alliance and CVS Health declined after a CNBC report that Amazon was close to a decision on selling prescription drugs. Amazon advanced. Costco dropped after the warehouse club retailer reported a fall in gross margins. General Motors advanced after data showed major auto makers posting solid sales gains in September.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$12.70 to US$1,261.80. Copper futures were down 0.6 percent to US$3.03. WTI spot crude was down US$1.50 to US$49.29. Dated Brent spot crude was down US$1.38 to US$55.62. The US dollar was up against the pound and the Australian dollar. It declined against the yen, pound, Swiss franc and the Canadian dollar. The Dollar Index was down 0.1 percent. The yield on the US Treasury 30 year bond was unchanged at 2.89 percent and 10 year note was up 1 basis point to 2.36 percent.
European markets
European stocks retreated Friday following the release of disappointing US jobs data. Investors also fretted over political risks in Spain and the UK. The FTSE edged up 0.2 percent but the CAC declined 0.4 percent and the DAX and SMI were 0.1 percent lower. The Spanish IBEX lost 0.3 percent Friday and 1.9 percent on the week. For the week, the FTSE was up 2.0 percent, the CAC gained 0.7 percent and the DAX and SMI added 1.0 percent.
Spanish banks came under selling pressure again after the Catalan government said it would press ahead with its planned parliament meeting Monday to discuss Sunday’s referendum result and announce a unilateral declaration of independence in defiance of a court ban. In the UK, pressure is mounting on Prime Minister Theresa May after former Tory party chairman Grant Shapps admitted he is running a campaign to oust her. Genmab slumped on a broker downgrade. Building materials group CRH dropped after acknowledging a rival third party bid for the takeover of Ash Grove Cement. Royal Mail advanced despite workers voting for an industrial action. Novartis also rose modestly after its eye care unit Alcon achieved European CE Mark for the Clareon IOL with the AutonoMe delivery system.
Renault advanced after announcing a six-year plan to deliver annual revenues of over €70 billion. Credit Swiss advanced after Iron Mountain said it will buy two data centers in London and Singapore. Roche Holding edged higher after US FDA approved the first test for screening Zika virus in blood donations. MS&AD Insurance Group Holdings agreed with Swiss Re to invest $1.05 billion to take a stake of up to 15 percent ReAssure Jersey One Ltd.
In economic news, German factory orders rebounded at a faster than expected pace in August. Factory orders were up 3.6 percent after declining a revised 0.4 percent in July. The French August trade deficit narrowed to an eight-month low thanks to a pickup in exports and a decline in imports.
Asia Pacific
Asian stock indices advanced Friday and for the week after the US Congress passed a $4.1 trillion budget resolution and data on jobless claims, factory orders and trade balance pointed to underlying strength in the economy. Markets in China and South Korea remained closed as they had been all week.
The Hang Seng hit its highest point since the global financial crisis Friday, bolstered by a continued rally in Chinese corporates. The index added 0.3 percent and 3.3 percent for the week. The index has rallied 29.4 percent so far this year to reach the same point it was at in late 2007. Hong Kong-listed Chinese blue chip stocks touched their highest level in more than two years in early trading on Friday, building on gains from earlier in the week.
Both the Nikkei and Topix added 0.3 percent thanks to a weakening yen on hopes for US tax reform and closing record highs for US shares Thursday. For the week, the Nikkei was up 1.6 percent and the Topix was 0.7 percent higher. Kobe Steel, Mitsubishi Motors, Dai-ichi Life Insurance, Mitsubishi UFJ Financial, Fast Retailing and Sumitomo Metal Mining all advanced. MS&AD Insurance was higher after it agreed to invest £800 million to acquire a stake of up to 15 percent in Swiss Re’s UK-based unit ReAssure Jersey One Ltd.
Both the S&P/ASX and All Ordinaries were up 1.0 percent. Miners BHP Billiton and Rio Tinto rallied and healthcare firm CSL advanced as the Australian dollar continued to fall following Thursday’s dismal retail sales data. Woodside Petroleum, Oil Search and Santos gained after crude oil prices rebounded to above $50 a barrel overnight. The big four banks all ended up higher.
The Sensex was up 0.7 percent and 1.7 percent for the week as Tata Steel unveiled strong quarterly production figures and investors waited for the outcome of a GST Council meeting later in the day. It is widely expected that the Centre will push through a raft of relief measures for small and medium enterprises.
Looking Forward

Central Bank activities

Oct 11

United States

FOMC Minutes Published

The following indicators will be released this week…

Europe

Oct 9

Germany

Industrial Production (August)

Oct 10

Germany

Merchandise Trade (August)

France

Industrial Production (August)

Italy

Industrial Production (August)

UK

Industrial Production (August)

Merchandise Trade (August)

Oct 12

Eurozone

Industrial Production (August)

Asia Pacific

Oct 11

Japan

Machinery Orders (August)

Oct 12

Japan

Producer Price Index (September)

India

Consumer Price Index (September)

Industrial Production (August)

Oct 13

China

Merchandise Trade (September)

Americas

Oct 10

Canada

Housing Starts (September)

United States

JOLTS (August)

Oct 12

United States

Initial Unemployment Claims (week ending prior Saturday)

Producer Price Index (September)

Oct 13

United States

Consumer Price Index (September)

Retail Sales (September)

Consumer Sentiment (October preliminary)

Business Inventories (September)

Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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