On 08 September, 2016 – Global stock indices continue to be mixed
Investors were disappointed that the ECB gave no signs of further easing.
United States
US stocks moved modestly lower Thursday, pulled down by a slide in technology companies, retailers and other consumer-focused businesses. Energy stocks were up along with oil prices rose after US oil inventories dropped 14.5 million barrels. Investors considered the implications of the European Central Bank’s decision to leave its monetary policy unchanged. Both the Dow Jones industrials and S&P declined 0.2 percent while Nasdaq retreated 0.5 percent.
Tractor Supply tumbled after it said its business is being hurt by cuts in the production of oil, gas and coal, declining outlays by farmers and weak spending on wood stoves and heating fuel for this fall and winter. Pier 1 Imports dropped after the company gave weak quarterly guidance and said its president and chief executive would leave the company at the end of the year by mutual agreement with the board. Tailored Brands gained 21.5 percent after the company reported solid quarterly results and maintained its forecasts for the year.
Hewlett Packard Enterprise declined after it agreed to spin off part of its business software unit to Micro Focus in a deal valued at $8.8 billion. Intel was lower after it said it would spin its cybersecurity business into a new company, which would again be called McAfee, for $3.1 billion in cash. The private equity firm TPG will invest $1.1 billion in the new company and own a majority stake. Apple declined a day after the company introduced its newest slate of products.
Weekly jobless claims were down 4,000 on the week to 259,000.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$4.95 to US$1,343.40. Copper futures were up 0.1 percent to US$2.10. WTI spot crude was up US$1.91 to US$47.41. Dated Brent spot crude was up US$1.77 to US$49.75. The US dollar was up against the yen, pound, Swiss franc and the Canadian and Australian dollars. However, it declined against the euro. The Dollar Index was up 0.2 percent. The yields on both the US Treasury 30 year bond and 10 year note were up 8 basis points to 2.31 percent and 1.61 percent respectively.
Europe
Stocks were mixed after the European Central Bank left its key interest rates unchanged for a fourth consecutive session and retained its asset purchases. The decision was in line with economists’ expectations, but some investors were disappointed after ECB President Mario Draghi revealed in his press conference that policymakers did not even discuss any extension of asset purchases beyond March 2017. The FTSE added 0.2 percent while the CAC, DAX and SMI retreated 0.3 percent, 0.7 percent and 0.1 percent respectively.
The ECB’s governing council left its refi rate unchanged at zero while the deposit rate remained at minus 0.40 percent and the marginal lending facility rate at 0.25 percent. According to the Bank’s statement, the council continues to expect “key ECB interest rates to remain at present or lower levels for an extended period of time, and well past the horizon of the net asset purchases.” The ECB also said that the monthly asset purchases of € 80 billion will “run until the end of March 2017, or beyond, if necessary, and in any case until it sees a sustained adjustment in the path of inflation consistent with its inflation aim.”
E-commerce investment firm Rocket Internet dropped after lowering the value of its Home24 online furniture business. In Paris, Air France KLM gained after reporting an increase in passenger traffic for August. Apple suppliers STMicro and Dialog Semiconductor declined after Apple launched the latest iteration of its iPhone. Dixons Carphone rallied after issuing a positive trading update for the first quarter. Pearson declined after John Wiley & Sons reported disappointing first quarter results. Novartis finished lower after its eye care division Alcon launched the NGENUITY 3D Visualization System, a platform for Digitally Assisted Vitreoretinal Surgery. Micro Focus surged after it agreed to buy Hewlett Packard Enterprise’s non-core software assets in a deal worth $8.8 billion. Standard Life and Admiral Group were lower after going ex-dividend.
Asia Pacific
Shares were mixed after oil extended overnight gains after API data indicated a massive draw in crude inventories last week. Investors were focused on the European Central Bank announcement which would take place later in the global market day.
The Shanghai Composite edged up 0.1 percent after improved merchandise trade data. The Hang Seng added 0.7 percent. The August trade surplus was $52.05 billion. Exports declined a less than expected 2.8 percent on the year. Imports increased 1.5 percent — expectations were for a decline.
The Nikkei was 0.3 percent lower, dragged down by financials after BoJ Deputy Governor Hiroshi Nakaso told reporters in Tokyo the Bank would not rule out deepening negative interest rates to achieve its inflation target. Investors ignored the upwardly revised GDP data, which showed that Japan’s economy expanded at a better-than-estimated 0.7 percent annualized pace in the April to June. Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Dai-ichi Life Insurance were lower. Nintendo soared after saying it would release a smartphone game featuring its Super Mario franchise in partnership with Apple. DeNA jumped after Nintendo said it would continue its partnership with the mobile specialist for the launch of Super Mario Run.
Both the S&P/ASX and All Ordinaries retreated 0.7 percent dragged down by banks and miners as better than expected Australian and Chinese trade data did little to shore up sentiment. ANZ dropped after reshuffling its management, while energy stocks Woodside Petroleum and Santos also were lower. Miners BHP Billiton and Fortescue Metals Group declined after iron ore prices were down for the third day in a row. Gold miners Newcrest and Northern Star Resources slid after gold futures slipped from a three week closing high on Wednesday. Sigma Pharmaceuticals soared after announcing strong first-half results and upgrading its full-year earnings guidance.
The Kospi inched up 0.1 percent. The Sensex rallied 0.4 percent.
Looking forward
China releases August consumer and producer price indices. Germany and the UK post July merchandise trade balances. Canada releases August labour force survey and housing starts.
Global Stock Markets
*Note — all releases are listed in local time.
Source: Fidelity
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