In addition to profit taking, geopolitical concerns sent investors to the sidelines.
United States
US stocks once again stayed close to the unchanged mark Friday. The Dow Jones industrials and S&P both declined 0.2 percent and 0.1 percent respectively while the Nasdaq inched up 0.89 point. On the week, the three indices were lower. The Dow was down 0.5 percent while both the S&P and Nasdaq retreated 0.2 percent. The weekly declines ended eight weekly advances by the Dow and the S&P and six weeks of gains for the Nasdaq.
Traders continued to digest the details of the Senate Republican version of tax reform legislation. The Senate bill includes some significant differences from the House of Representative’s version, including a delay in the implementation of a cut in the corporate tax rate by one year to 2019. A number of other differences related to issues such as deductions and the estate tax have raised questions about the outlook for tax reform.
JC Penney closed sharply higher after the department store operator reported a narrower than expected third quarter loss on better than expected revenues. Nvidia also advanced after reporting third quarter results that beat estimates. Finish Line however declined after a broker downgrade. The Trade Desk also posted a steep loss after reporting better than expected third quarter results but providing disappointing revenue guidance. Intel and Apple both declined. Disney was higher as the promise of a new “Star Wars” trilogy overshadowed its weak quarterly results. Time Warner jumped along with News Corp.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down 50 US cents to US$1,284.30. Copper futures were down 0.3 percent to US$3.08. WTI spot crude was down 43 US cents to US$56.74. Dated Brent spot crude was down 41 US cents to US$63.52. The US dollar was up against the yen, Swiss franc and the Australian dollar. It retreated against the euro and pound and was virtually unchanged against the Canadian dollar. The Dollar Index was down 0.15 percent. The yield on the US Treasury 30 year bond was up 8 basis points while the 10 year note was up 7 basis points to 2.40 percent.
European markets
Stocks declined across the board as investors continued to monitor the tensions in the Middle East along with the outlook for US tax reform at the end of the trading week. The FTSE was down 0.7 percent, the CAC and SMI slid 0.5 percent and the DAX declined 0.4 percent. The indices dropped for the week as well. The FTSE lost 1.7 percent, the CAC declined 2.5 percent, the DAX dropped 2.6 percent and the SMI was 2.0 percent lower.
Allianz Group slid after the insurer announced a new €2 billion share buyback plan despite reporting lower operating profit for the third quarter. Freenet rallied after posting higher third-quarter sales and earnings. Vallourec tumbled despite posting turnaround results for the third quarter of 2017. Fuel company Rubis advanced on solid third-quarter results. Burberry Group retreated to extend Thursday’s losses after a broker downgrade. Siemens was down on a broker downgrade.
Vedanta Resources was lower after reporting a 37 percent rise in half-year profit. Richemont dropped in Zurich after it reported results for the first half of the year. Roche, Nestlé and Novartis also declined in Zurich. Arcelor Mittal jumped in Amsterdam after the producer of steel sounded upbeat about 2018 after posting better-than-expected core profit for the third quarter.
September French industrial production was up a monthly 0.6 percent, reversing a 0.2 percent decline in August. UK industrial production grew at the fastest pace thus far this year in September. Industrial production rose 0.7 percent from August, when it increased 0.3 percent. The UK visible trade deficit narrowed in September to £11.25 billion from £12.35 billion in August.
Asia Pacific
Asian stocks were mostly lower Friday — uncertainty on the US tax reform plan dented investor sentiment and boosted demand for safe-haven assets gold and the Japanese yen.
The Shanghai Composite inched up 0.1 percent after reports that China is considering expanding corporate tax cuts for high-tech service companies. The Hang Seng slipped 0.1 percent. On the week, both added 1.8 percent.
The Nikkei and Topix retreated 0.8 percent and 0.7 percent respectively with a stronger yen and losses in technology stocks weighing on markets. On the week, the Nikkei was up 0.6 percent and the Topix was 0.4 percent higher. Fanuc, Tokyo Electron and Advantest declined along with Toshiba. Bridgestone slumped after slashing its full-year operating profit forecast.
Both the S&P/ASX and All Ordinaries were down 0.3 percent as shares retreated from near 10-year highs hit in the previous session thanks to weak commodity prices. Both indices advanced 2.3 percent on the week. Miners BHP Billiton and Rio Tinto declined after a reversal in Chinese iron ore futures on Thursday. Energy stocks such as Woodside Petroleum, Oil Search and Santos also were lower. News Corp soared after the publishing arm of Rupert Murdoch’s media empire reported first-quarter EBITDA that nearly doubled from last year. Online real-estate advertiser REA Group advanced after reporting a 24 percent increase in September quarter earnings from core operations.
The Kospi declined 0.3 percent and was down 0.6 percent on the week. The Sensex added 0.2 percent but dropped 1.1 percent on the week.
Looking forward

The following indicators will be released this week…

Europe

Nov 14

Eurozone

Gross Domestic Product (Q3. 2017 preliminary)

Industrial Production (September)

Germany

Gross Domestic Product (Q3. 2017 preliminary)

Zew Survey (November)

Italy

Gross Domestic Product (Q3. 2017 preliminary)

UK

Consumer Price Index (October)

Producer Price Index (October)

Nov 15

Eurozone

Merchandise Trade (September)

UK

Labour Market Report (October)

Nov 16

Eurozone

Harmonized Index of Consumer Prices (October final)

Italy

Merchandise Trade (September)

UK

Retail Sales (October)

Asia Pacific

Nov 13

Japan

Producer Price Index (October)

India

Consumer Price Index (October)

China

Industrial Production (October)

Retail Sales (October)

Nov 15

Japan

Gross Domestic Product (Q3. 2017 preliminary)

Nov 16

Australia

Labour Force Survey (October)

Americas

Nov 14

United States

Producer Price Index (October)

Nov 15

United States

Consumer Price Index (October)

Retail Sales (October)

Empire State Manufacturing Index (November)

Business Inventories (September)

Nov 16

Canada

Manufacturing Sales

United States

Initial Unemployment Claims (week ending prior Saturday)

Import/Export Prices (October)

Philadelphia Fed Manufacturing Index (November)

Industrial Production (October)

Nov 17

Canada

Consumer Price Index (October)

United States

Housing Starts (October)

Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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