On Friday, they were mixed in Asia but gained in Europe and the US.
United States
US stocks advanced Friday for the fifth consecutive day. With the advances, all three major averages once again ended the session at record closing highs. On Friday, the Dow Jones industrials were up 0.7 percent, the S&P gained 0.6 percent and the Nasdaq was 0.5 percent higher. For the week, the Dow and S&P were up 3.1 percent and the Nasdaq added 3.6 percent. The strength in shares reflected a continuation of the upward momentum seen following President-elect Donald Trump’s surprise victory in last month’s presidential election.
The University of Michigan said the preliminary December consumer sentiment index was 98.0, up from the final November reading of 93.8. According to the survey’s chief economist, “The surge was largely due to consumers’ initial reactions to Trump’s surprise victory.” October wholesale inventories declined amid a surge in sales, supporting views that inventory investment would help economic growth in the fourth quarter.
Bristol-Myers Squibb jumped after raising its quarterly dividend by 2.6 percent to $0.39 per share. Goldman Sachs Group was the biggest weekly contributor to the Dow. Athene Holding advanced.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$7.45 to US$1,163.60. Copper futures were up 0.8 percent to US$2.65. WTI spot crude was up 66 US cents to US$51.50. Dated Brent spot crude was up 44 US cents to US$54.33. The US dollar was up against the yen, euro, Swiss franc and the Australian dollar. However, it was unchanged against the pound and declined against the Canadian dollar. The Dollar Index was up 0.5 percent. The yield on US Treasury 30 year bond was up 5 basis points to 3.15 percent while the yield on the 10 year note climbed 7 basis points to 2.47 percent.
Europe
Stocks markets in Europe advanced with the exception of the MIB, which lost 0.7 percent. The FTSE was up 0.3 percent, the CAC gained 0.6 percent, the DAX advanced 0.2 percent and the SMI added 1.8 percent. For the week, however, all indices gained. The FTSE was up 3.2 percent, the CAC jumped 6.6 percent, the DAX leapt 6.6 percent and the SMI was 4.1 percent higher. The MIB, despite Friday’s loss added 7.1 percent on the week.
Trading action was more subdued at the end of the week as the euphoria generated by Thursday’s announcement from the European Central Bank faded. The ECB announced Thursday that bond purchases will be extended till the end 2017, which was longer-than-expected.
Germany’s economy is continuing its solid upturn, underpinned by buoyant domestic demand that is boosted by a strong labor market situation and rising household incomes according to the Bundesbank after it raised its growth forecasts for this year and next. Gross domestic product is expected to grow 1.8 percent this year, which was slightly faster than the 1.7 percent expansion predicted in June. Growth will continue at 1.8 percent in 2017, which was much stronger than 1.4 percent forecast in June. The bank retained the projection for 2018 at 1.6 percent and predicted 1.5 percent expansion for 2019.
Evotec rose after it announced a strategic alliance with biotechnology start-up Forge Therapeutics. Both Fresenius Medical Care and Fresenius gained. Merck KGaA and Bayer were higher. Vivendi rallied after the media conglomerate increased its stake in game publisher Ubisoft. Air France KLM was lower. According to the International Air Transport Association, airlines are expected to post a record net profit of $35.6 billion for 2016, slightly lower than its previous view. Capita was lower a day after the outsourcing group issued its second warning in three months and said it would sell its asset services division. Smith & Nephew increased on a broker upgrade. Sky soared after 21st Century Fox reached a deal to acquire the remaining stock in the company that it does not already own for £18.5 billion.
Asia Pacific
Asian stocks were mixed Friday even though US shares hit fresh record highs overnight. Data showed US labor market strength while the ECB announced changes to the parameters of the asset purchase program. Investors were looking ahead to Wednesday’s Federal Reserve announcement. Traders also turned their attention to the weekend meeting between OPEC and non-OPEC producers to discuss coordinating cuts in production. Russia and other oil producers agreed on Saturday to join OPEC nations in a coordinated reduction in oil output meant to lift petroleum prices and revenues to shore up their sagging government budgets.
The Shanghai Composite was up 0.5 percent after November consumer inflation picked up for a third straight month on signs of improving demand. The CPI was up 2.3 percent from the same month a year ago while producer prices surged 3.3 percent — the fastest pace in more than five years. The Hang Seng however retreated 0.4 percent. On the week, the Shanghai Composite was down 0.3 percent while the Hang Seng added 0.9 percent.
The Nikkei was up 1.2 percent and the Topix added 0.8 percent as the yen weakened against the dollar and a survey showed large Japanese manufacturers turned more optimistic about economic conditions in the fourth quarter. On the week, the Nikkei and Topix were up 3.1 percent and 3.2 percent respectively. Honda Motor advanced after unveiling plans to build its third automobile production plant in China. Fast Retailing rallied while oil majors JX Holdings, Inpex and Japan Petroleum climbed. Marui Group advanced on a Nikkei report that its rental income from retail operations is likely to jump 130 percent in fiscal 2016.
Both the S&P/ASX and All Ordinaries were up 0.3 percent Friday. For the week, both indices added 2.1 percent. Higher oil prices pushed up energy stocks, with Origin Energy and Woodside Petroleum rallying. Banks ANZ, Commonwealth and NAB advanced.
The Kospi lost 0.3 percent and was 2.7 percent higher on the week. The Sensex was up 0.2 percent and 2.0 percent on the week.
Looking Forward

Central Bank activities

Dec 14

United States

FOMC Monetary Policy Announcement

Fed Chair Janet Yellen Press Conference

Dec 15

UK

Bank of England Monetary Policy Announcement

The following indicators will be released this week…

Europe

Dec 13

Germany

ZEW Survey (December)

UK

Consumer Price Index (November)

Producer Price Index (November)

Dec 14

Eurozone

Industrial Production (October)

UK

Labour Market Report (November)

Dec 15

Eurozone

Manufacturing , Services & Composite PMI December flash)

Germany

Manufacturing , Services & Composite PMI December flash)

France

Manufacturing , Services & Composite PMI December flash)

UK

Retail Sales (November)

Dec 16

Eurozone

Merchandise Trade Balance (October)

Harmonized Index of Consumer Prices (November)

Asia Pacific

Dec 12

Japan

Producer Price Index (November)

Machine Orders (October)

Dec 13

China

Industrial Production (November)

Retail Sales (November)

Dec 14

Japan

Tankan Survey (Q4. 2016)

Dec 15

Japan

PMI Manufacturing Index (December flash)

Americas

Dec 13

United States

Import/Export Prices (November)

Dec 14

United States

Retail Sales (November)

Producer Price Index (November)

Industrial Production (November)

Dec 15

Canada

Manufacturing Sales (October)

United States

Initial Unemployment Claims (week ending prior Saturday)

Consumer Price Index (November)

Empire State Survey (December)

Philadelphia Fed Survey (December)

Dec 16

United States

Housing Starts (November)

Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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