On 04 May, 2016 – Global stocks continue to slide

Mixed economic data and earnings weighed on investor sentiment.
United States
US shares were lower Wednesday after a very soft report on job creation gave investors concern over the state of the economy. The data followed a round of economic news from China and Europe a day earlier that also suggested sluggish growth. The Dow Jones industrials and S&P lost 0.6 percent while the Nasdaq retreated 0.8 percent.
It was a heavy day for new economic data. The ADP private payroll report said that businesses added 156,000 jobs in April, the weakest pace in three years. However, these data are subject to extensive revisions. The April ISM nonmanufacturing report indicated that service activity picked up during the month. The index was 55.7, up from 54.5 in March. The March international trade deficit narrowed to $40.4 billion from $47.0 billion in February. Both exports and imports retreated on the month.
Priceline was down after the company warned that profits would slow in the second quarter. Shares of the Intercontinental Exchange advanced after the company announced it would not bid for the London Stock Exchange. The announcement came as Intercontinental was reporting first quarter earnings, which were better than expected. Goldman Sachs Group retreated. Zillow climbed a day after the online real estate listings provider raised its full-year revenue outlook.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$11.00 to US$1,283.00. Copper futures were down 1.5 percent to US$2.19. WTI spot crude was up 23 US cents to US$43.88. Dated Brent spot crude was down 22 US cents to US$44.75. 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 0.2 percent. The yield on US Treasury 30 year bond was down 3 basis points to 2.63 percent while the yield on the 10 year note slipped 2 basis points to 1.78 percent.
Europe
Stocks continued to decline Wednesday thanks to disappointing regional economic data and some weaker than expected corporate earnings results. The FTSE and SMI each lost 1.2 percent, the CAC retreated 1.1 percent and the DAX was 1.0 percent lower.
Dialog Semiconductor was down after cutting its full-year revenue outlook. Car-parts maker Continental declined after reiterating its preliminary figures published on April 29. Deutsche Telekom declined even though its first quarter revenue and profits beat estimates. HeidelbergCement climbed after the company raised its outlook for 2016 after posting a narrower first quarter loss. Siemens advanced after it affirmed its FY16 outlook despite reporting a 63 percent drop in second-quarter net profit. Adidas retreated after it reported that its net income attributable to shareholders for the first quarter rose to €351 million or €1.71 per share from €221 million or €1.08 per share in the prior year quarter.
In Paris, Air France KLM was down after the airline group warned of geopolitical risks and airline overcapacity after narrowing its first quarter loss, helped by lower fuel costs. Resource management firm Veolia Environnement was down on reporting an 18 percent fall in first-quarter net income. Société Générale climbed after the lender revealed further plans to cut costs this year after reporting a surprise increase in first quarter profit. In London, BHP Billiton retreated on concerns the penalties associated with the Samarco dam disaster may be worse than initially thought. Glencore was lower on reports the company is trying to sell its Vasilkovskoye gold mine in Kazakhstan. The London Stock Exchange retreated after Intercontinental Exchange confirmed that it has no current intention to make an offer for the company. J Sainsbury tumbled after the supermarket chain issued a cautious outlook after reporting a 14 percent drop in annual pretax profits. Royal Dutch Shell declined after posting an 89 percent drop in first-quarter net profit on weak revenues.
March Eurozone retail sales dropped for the first time in five months. Retail sales slid 0.5 percent on the month. The euro area private sector expanded at a slower pace in April. The composite PMI dropped marginally to 53 in April from 53.1 in March. The index signaled expansion in each of the past 34 months. The British construction sector expanded at the weakest pace in almost three years as spending decisions were delayed by clients on “Brexit” fears.
Asia Pacific
Stocks retreated Wednesday, with markets in Australia, Hong Kong, Singapore and Taiwan bearing the brunt of the selling after US stocks hit a three week low overnight in reaction to falling oil prices, weak Chinese and UK manufacturing data. The downgrades to GDP and inflation forecasts from the European Commission also added to the gloom. Markets in Japan remained closed for the Golden Week holidays.
The Shanghai Composite was virtually unchanged (down 1.37 points) despite downward pressure on resource shares in the wake of a regulatory crackdown to curb speculation in commodities markets. The Hang Seng was down for a third day, this time losing 0.7 percent. China cut its yuan fixing against the US dollar by the most since its devaluation last August, as the dollar index rebounded from its multi-month low on concerns about a positive interest rate increase by the Federal Reserve in June and lingering worries about the Brexit referendum in June.
Both the S&P/ASX and All Ordinaries lost 1.5 percent after Brazilian prosecutors filed a civil suit against Vale, BHP Billiton and their iron ore joint venture. BHP Billiton tumbled on concerns the penalties associated with the Samarco dam disaster may be worse than initially thought. Rio Tinto and Fortescue Metals Group retreated after iron ore futures tumbled on signs of rising port inventories in China. Gold miner Newcrest Mining and Evolution Mining were down after gold prices turned lower after nearing a 15-mongh high. Banks retreated. In economic news, the April Australian Industry Group’s performance of services index edged up to 49.7 from 49.5 in March, suggesting activity levels have stabilized.
The Kospi lost 0.5 percent as global growth worries pushed investors to the sidelines ahead of public holidays on Thursday and Friday. The Sensex also was 0.5 percent lower.
Global Stock Markets

Please remember, the value of investments and the income from them can do down as well as up. Funds that invest in overseas markets may be subject to currency fluctuations. Investments in small and emerging markets can be more volatile than other overseas markets. Reference in this document to specific securities should not be construed as a recommendation to buy or sell these securities, but is included for the purposes of illustration only.
Looking forward*
Australia posts March merchandise trade balance and retail sales. The UK reports April Halifax house price index and services PMI. In the US, weekly jobless claims, money supply and Fed balance sheet will be released.
*Note — all releases are listed in local time.

Source: Fidelity

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