On 07 December, 2016 – Global stocks rallied
However, investors are waiting for the ECB’s announcement Thursday morning
United States
Wall Street surged Wednesday, with the Dow Jones industrials and S&P hitting fresh records, as stocks continued their march upward after the election of Donald Trump as US president. The Dow added 1.5 percent, the S&P gained 1.3 percent and the Nasdaq was 1.1 percent higher.
Twenty-seven of the 30 constituents in the Dow rose, with Home Depot and Nike leading the gains. In contrast, biotechnology shares along with pharmaceutical stocks such as Pfizer and Johnson & Johnson retreated after President-elect Donald Trump said in an interview that he intends to bring down drug prices.
Western Digital was up after the data storage company raised its second-quarter profit and revenue forecasts. Micron also advanced. Nike and Home Depot also posted healthy gains as did Under Armour and Delphi Automotive. Universal Health Services, Endo International, Mallinckrodt and Mylan retreated. Dave & Buster’s moved sharply higher after the restaurant chain reported better than expected third quarter results and raised its full-year guidance. Sigma Designs was lower after the chip maker reported better than expected third quarter earnings but on revenues that missed estimates.
Job openings dipped 1.7 percent in October to 5.534 million from an upward revised 5.631 million in September. Hiring also slowed, down 0.4 percent to 5.099 million. Year-on-year, openings are up 2.1 percent in contrast to a 2.2 percent decline for hiring.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$5.15 to US$1,177.65. Copper futures were down 1.3 percent to US$2.65. WTI spot crude was down US$1.00 to US$49.93. Dated Brent spot crude was down 83 US cents to US$53.10. The US dollar was down against the euro, yuan, Swiss franc and the Canadian and Australian dollars. However, it was up against the pound. The Dollar Index was down 0.3 percent. The yield on US Treasury 30 year bond was down 4 basis points to 3.03 percent while the yield on the 10 year note was down 5 basis points to 2.34 percent.
Europe
Stocks rallied thanks to the strength of bank stocks. Italian banks were among the top performers on reports that Italy is preparing to take a €2 billion controlling stake in Monte dei Paschi di Siena. Investors were also hopeful that the European Central Bank will extend its asset purchase program at its meeting Thursday. The FTSE jumped 1.8 percent, the CAC was up 1.4 percent, the DAX added 2.0 percent and the SMI edged up 0.2 percent.
Markets are expecting European Central Bank President Mario Draghi to announce an extension of asset purchases beyond March 2017 amid the high political uncertainty, especially after the ‘no’ vote in the Italian referendum last weekend.
Volkswagen advanced after launching its new, stand-alone mobility services company named Moia, which will focus on ride-hailing and on-demand pooling services. Banks including Deutsche Bank, Commerzbank, Société Générale, BNP Paribas and Crédit Agricole finished higher. In London, Royal Bank of Scotland, Lloyds Banking Group, Standard Chartered, Barclays and HSBC also advanced.
ThyssenKrupp and Salzgitter gained. In London, transport company Stagecoach Group rallied after raising its interim dividend and retaining its annual earnings outlook. Sage Group gained after the company announced that it is evaluating potential strategic options for its North American payments business, including a sale. Rio Tinto surged on a broker upgrade. BHP Billiton advanced on rising copper prices. Credit Suisse surged in Zurich. Market conditions have forced the Swiss banking giant to announce more than 1 billion Swiss francs in extra cost cuts. Monte dei Paschi di Siena surged in Milan on reports that Italy is preparing to take a €2 billion controlling stake in the troubled lender.
Germany’s October industrial production was up 0.3 percent on the month after declining a revised 1.6 percent in September. UK October industrial production declined unexpectedly as the shutdown for maintenance of oil fields dampened output. Industrial production declined 1.3 percent from September, the biggest drop since September 2012.
Asia Pacific
Most Asian stocks were higher Wednesday before Thursday’s highly-anticipated ECB meeting. Oil prices eased further in Asia after tumbling overnight on data showing record high production in the producer group and API data showing solid builds in gasoline and distillate inventories.
The Nikkei was up 0.7 percent and the Topix added 0.9 percent thanks to a weaker yen and another record close in US markets overnight bolstering investor sentiment. SoftBank jumped on news the mobile carrier plans to invest $50 billion in the US and create 50,000 jobs. Panasonic rose after unveiling plans to produce refrigerators in India.
Both the S&P/ASX and All Ordinaries added 0.9 percent even though third quarter GDP data disappointed. Rather investors’ hopes were raised that the Reserve Bank of Australia will keep its easing bias intact. Australia’s third quarter GDP declined 0.5 percent on the quarter. It was the first time GDP contracted since the global financial crises. BHP Billiton, Rio Tinto and Fortescue Metals Group climbed after iron ore prices climbed overnight. Iluka Resources advanced after the company revived its A$375 million takeover of Sierra Leone miner Sierra Rutile.
The Shanghai Composite was up 0.7 percent to snap a three-day decline while the Hang Seng added 0.6 percent. The Kospi edged up 0.1 percent.
The Sensex declined 0.6 percent after the Reserve Bank of India (RBI) kept its key policy rates unchanged, surprising market participants who had expected a 25 basis points rate cut. The RBI left its repo rate unchanged at 6.25 percent, saying the assessment is clouded by the still unfolding effects of the withdrawal of old Rupee 500 and 1,000 notes. The six-member monetary policy committee (MPC), headed by RBI Governor Urjit Patel also considered the “heightened uncertainty” in financial markets before next week’s FOMC meeting.
Looking Forward
Japan posts revised third quarter gross domestic product. Australia reports October merchandise trade. The European Central Bank announces its monetary policy decision. In the US, weekly jobless claims, money supply and Fed balance sheet will be reported.
Global Stock Markets
*Note — all releases are listed in local time.
Source: Fidelity
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