On 16 November, 2017 – Most global stock indices rebounded from losses incurred earlier in the week
United States
US indices rebounded from the previous day’s losses thanks to earnings from Wal-Mart and Cisco. A tax bill expected to boost corporate earnings passed its first hurdle. The Dow Jones industrials and S&P advanced 0.8 percent each while the Nasdaq climbed 1.3 percent.
US lawmakers took the first step on Thursday towards advancing tax reform, with a majority of the House of Representatives voting to approve that chambers’ version of the bill. The final vote in the House was 227 to 205 along party lines. The Senate is still working on its bill to overhaul the US tax code, which hit turbulence on Wednesday after two critical senators expressed misgivings about its contents.
Wal-Mart surged to a record high after reporting its strongest US revenue growth since 2009 along with soaring online sales. Cisco touched its highest since February 2001, a day after its quarterly profits beat expectations driven by gains from its newer businesses such as security, which more than offset declines in its traditional switches and routers. Its profit forecast also was above estimates. JM Smucker was higher after its sales and profit topped analysts’ forecasts. Viacom declined after the MTV owner said it expected high single-digit declines in revenue from US cable TV operators and online distributors in the first half of 2018.
Dallas Federal Reserve Bank President Robert Kaplan on Thursday repeated that he is “very open-minded and actively thinking about” a possible interest-rate hike at the U.S. central bank’s next policy meeting. “I’m very open-minded… about considering taking a next step in removing accommodation at upcoming meetings,” Kaplan, a voting member of the Fed’s policy committee this year, told reporters after a talk at the Dallas Fed’s Houston branch.
Weekly initial jobless claims increased 10,000 to 249,000. October import prices rose by a monthly 0.2 percent after climbing by 0.8 percent in September. Export prices were unchanged on the month after increasing by 0.7 percent in the previous month. Growth in Philadelphia-area manufacturing activity slowed to 22.7 in November from 27.9 in October. October industrial production climbed 0.9 percent after rising by an upwardly revised 0.4 percent in September.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$2.20 to US$1,280.00. Copper futures were down 0.1 percent to US$3.05. WTI spot crude was down 14 US cents to US$55.19. Dated Brent spot crude was down 50 US cents to US$61.37. The US dollar was up against the yen, euro and Swiss franc. It retreated against the pound and the Canadian dollar. The currency was unchanged against the Australian dollar. The Dollar Index was up 0.04 percent. The yield on the US Treasury 30 year bond was up 5 basis points to 2.82 percent while the 10 year note was up 4 basis points to 2.37 percent.
European markets
European stock indices rebounded from losses earlier in the week. Bargain hunting helped to drive the markets higher, as investors stepped in to snap up stocks at lower prices. Automakers advanced after European new car registrations rebounded in October. Solid corporate news from companies like Bouygues and British Land also contributed to the positive mood among investors. The FTSE was up 0.2 percent, the CAC gained 0.7 percent, the DAX added 0.5 percent and the SMI was 0.6 percent higher.
Deutsche EuroShop climbed after the real estate investment company confirmed its fiscal year outlook after it reported an 18 percent increase in consolidated profit for the first nine months of 2017. Deutsche Bank advanced a day after US buyout fund Cerberus took a 3 percent stake in the bank. Volkswagen jumped after it unveiled plans to launch 15 new energy vehicles over 2 to 3 years.
Bouygues climbed after the company confirmed its fiscal year 17 profit growth view after more than doubling its nine-month net profit. GKN sank after saying its write-offs related to troubles with its US plant could be up to £130 million. British Land gained even though it reported lower underlying profit in the half year to September. Electrolux fell in Stockholm despite issuing positive outlook for 2018. Julius Baer and Credit Suisse both climbed along with UBS. Roche, Novartis and Nestlé also closed higher.
Europe’s new car registrations rebounded in October. Passenger car sales climbed 5.9 percent on the year, reversing a 2 percent decline in September. Eurozone inflation eased to 1.4 percent in October from 1.5 percent in September. The rate came in line with the flash estimate released on October 31. France’s unemployment rate increased in the third quarter. The jobless rate climbed to 9.7 percent from 9.5 percent in the second quarter. This was the highest since the fourth quarter of 2016. UK retail sales increased a monthly 0.3 percent in October reversing the 0.7 percent drop in September. Excluding fuel, sales volume edged 0.1 percent higher following a 0.6 percent drop in September.
Asia Pacific
Asian stock indices were mixed Thursday. The yen weakened and investors looked ahead to the US. House vote on a sweeping tax reform bill later in the global market day.
The Nikkei rebounded 1.5 percent and the Topix added 1.0 percent after a weakening yen helped offset declines in US stocks overnight. Japan Steel Works, Chugai Pharma, Shiseido, Nippon Paper Industries and Nippon Sheet Glass were among the top gainers. Shiseido was higher on a broker upgrade. Komatsu retreated after fellow earth moving equipment maker Caterpillar declined overnight.
Both the S&P/ASX and All Ordinaries erased early losses and were up 0.2 percent. Santos was up after it said it rejected an unsolicited, “inadequate” August offer from U.S. investment vehicle Harbour Energy. Oil Search and Beach Energy rallied. Miners ended narrowly mixed after base metals prices slid sharply Wednesday on concerns about slowing Chinese growth. Newspaper publisher Fairfax Media tumbled after the spin-out of its online real estate business Domain Holdings Australia. October unemployment rate slipped to a four and a half low of 5.4 percent. Employment increased a modest 3,700 after adding 19.800 jobs in September.
The Shanghai Composite slipped 0.1 percent while the Hang Seng added 0.6 percent. The Kospi jumped 0.7 percent. The Sensex added 1.1 percent.
Looking forward
Canada posts October consumer price index. Housing starts for October will be reported in the US.
Global Stock Market Recap
*Note — all releases are listed in local time.
Source: Fidelity
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