Daily Global Market Update - Fidelity Worldwide Investment

Daily Global Market Update
11 February, 2015
Investor optimism for a potential Greek debt deal buoyed European markets
Stocks were mixed Tuesday as investors monitored the latest news from Greece.
United States
US stocks rallied Tuesday buoyed by hopes for a deal between Greece and its international
creditors. The Dow Jones industrials were up 0.8%, the S&P added 1.1% and the Nasdaq was
1.3% higher. Tuesday’s stock market moves reversed Monday’s losses when stocks fell amid
worries about the standoff between Greece and its creditors.
Coca-Cola gained after its fourth quarter profit beat analysts’ expectations. The company which
derives most of its profit overseas said 2015 would be a “transition year” as it deals with cost
cutting plans and currency impacts. Energy stocks declined thanks to falling crude oil prices.
Qualcomm advanced after it said it reached a settlement with the Chinese government in its
investigation into whether the US chip maker violated the country’s antimonopoly law. Starwood
Hotels & Resorts Worldwide plans to spin off its vacation ownership business into a separate
company. It said the move would take advantage of the increasing growth opportunities in the
timeshare industry. Pfizer was up after saying it would buy back US$5 billion of its stock.
Gold at the afternoon London fixing was down US$4.00 to US$1,234.50. Copper futures were
down 1.1% to US$2.55. WTI spot crude was down US$2.39 to US$50.47. Dated Brent spot crude
was down US$1.44 to US$56.90. The US dollar was up against the yen, Swiss franc and the
Canadian and Australian dollars. It was virtually unchanged against the euro. However, it
declined against the pound. The Dollar Index was up 0.2%. The yields on both the US Treasury
30 year bond and the 10 year note were up 4 basis points to 2.57% while the yield on the 10 year
note slipped 4 basis points to 1.99%.
Europe
Stocks were mostly higher Tuesday. Investor optimism for a potential Greek debt deal was the
driving force behind the gains. Energy and mining stocks were among the weakest performing
stocks due to declines in the price of oil and in the price of precious metals. The CAC and DAX
advanced 1.0% and 0.8% respectively. However, both the SMI and FTSE retreated 0.1%.
Eurozone officials are reportedly considering extending Greece's bailout program by up to six
months. The European Commission will reportedly offer the proposal amid indications that the
new Greek government is softening its rhetoric behind the scenes. The reports eased concerns
about the Greek debt negotiations after a defiant speech by new Greek Prime Minister Alexis
Tsipras weighed on the markets on Monday.
HeidelbergCement, which reported fourth-quarter results, gained. BMW finished higher after the
firm reported a 7% growth in January sales. Daimler and Volkswagen also gained. Michelin
dropped after reporting full year figures. Both Total and Technip were down. Royal Mail dropped
on a broker downgrade. Mondi climbed after the company confirmed that underlying operating
profit for the year ended December 31, 2014 is expected to be above the €699 million achieved in
2013. Mining stocks were weak thanks to a decline in gold prices. Fresnillo, Randgold Resources,
Rio Tinto, Antofagasta, BHP Billiton and Anglo American all declined on the day. UBS was down
after the lender reported fourth quarter results.
French industrial output was up a surprising 1.5% in December after declining 0.2% in November.
UK industrial production declined a more than expected 0.2% in December as maintenance work
in the North Sea fields dragged oil output lower. However, the manufacturing sector edged up
0.1%. Italian industrial production was up for a second straight month in December, defying
expectations for stagnation. Industrial production grew a seasonally adjusted 0.4% monthly after
a 0.3% gain in November.
Asia Pacific
Stocks were mixed a day after Greek Prime Minister Alexis Tsipras rejected an extension of the
international bailout and vowed to reverse the austerity imposed by the previous government,
fanning fresh fears of a possible Greek exit from the Eurozone. While escalating violence in
eastern Ukraine added to the downbeat sentiment, Chinese shares gained for a second day on
stimulus hopes.
The Shanghai Composite was up 1.5%. Weak inflation data fanned expectations that the
People’s Bank of China would adjust its monetary policy to support weakening economic growth.
The Hang Seng however was virtually unchanged (up 7.10 points). The January consumer price
index was up just 0.8% on the year after increasing 1.5% in December. Expectations were for an
increase of 1.0%. The producer price index also missed forecasts, dropping 4.3% on the year,
marking its 35th consecutive monthly decline.
The Nikkei retreated 0.3% thanks to a stronger yen. The currency edged up slightly against the
US dollar after European Commission President Jean-Claude Juncker warned Greeks not to
expect the Eurozone to accept the latest terms proposed by Greece's new government. Fast
Retailing and SoftBank were lower while Fanuc rallied. Exporter shares closed mostly higher with
Canon, Sharp and Nikon advancing. Nissan Motor gained after the automaker raised its full year
profit forecast after reporting a 24% increase in net income for the nine months ended December.
Honda Motor, Suzuki Motor and Toyota Motor were up while Mazda Motor declined.
Australian shares fell for a second consecutive session as renewed worries about Greek debt
negotiations gave investors a reason to book some profits after recent sharp gains. Both the
S&P/ASX and All Ordinaries were down 0.2%. The Kospi declined 0.6% while the Sensex added
0.5%.
Global Stock Market Recap
End
2014
Feb 9
Dow
NASDAQ
S&P 500
S&P/TSX Comp**
16576.7
17729.2
17868.8
139.5
0.8
0.3
11.7
4176.6
4726.0
4787.6
61.6
1.3
1.1
14.2
1848.4
2046.7
2068.6
21.9
1.1
0.5
13.7
13621.6
15100.7
15112.5
11.8
0.1
3.3
8.9
FTSE 100
CAC
XETRA DAX
MIB
Ibex 35
OMX Stockholm
30
SMI
6749.1
6837.2
6829.1
-8.0
-0.1
4.0
2.3
4296.0
4651.1
4695.7
44.6
1.0
9.9
9.6
9552.2
10663.5
10753.8
90.3
0.8
9.7
13.5
18967.7
20366.6
20725.6
359.0
1.8
9.0
4.2
9916.7
10364.9
10500.1
135.2
1.3
2.1
4.1
1333.0
1591.4
1602.7
11.3
0.7
9.4
20.0
8203.0
8632.1
8620.4
-11.7
-0.1
-4.0
3.1
Index
North America
United States
Canada
Europe
UK
France
Germany
Italy
Spain
Sweden
Switzerland
Asia/Pacific
Australia
All Ordinaries
Japan
Nikkei 225
Hong Kong
Hang Seng
S. Korea
Kospi
Singapore
STI
China
Shanghai Comp
India
Sensex 30
Data Source — Haver Analytics
2015
Feb 10
Daily
Change
Percent Change
Daily
2015
Yr/Yr
5353.1
5770.2
5757.4
-12.7
-0.2
6.8
9.3
16291.3
17711.9
17652.7
-59.3
-0.3
1.2
n.a.
23306.4
24521.0
24528.1
7.1
0.0
3.9
11.7
2011.3
1947.0
1935.9
-11.1
-0.6
1.1
0.2
3167.4
3418.0
3434.2
16.2
0.5
2.1
13.4
2116.0
3095.1
3141.6
46.5
1.5
-2.9
49.3
21170.7
28227.4
28355.6
128.2
0.5
3.1
39.2
Looking forward*
Australia releases December home loan data. The US Treasury budget for January will be
published.
*Note — all releases are listed in local time.
The Longer-Term Perspective
The table below demonstrates that while we may experience some short-term weakness in
markets, the longer-term performance remains encouraging.
Equity markets as at 10/02/2015
Market
% change
12 mths to
10/02/2015
Source: Datastream, Price Index Returns in local currency
% change
12 mths to
10/02/2014
% change
12 mths to
10/02/2013
% change
12 mths to
10/02/2012
% change
12 mths to
10/02/2011
US: Dow Jones
13.08
12.93
9.31
4.68
21.83
US: S&P 500
14.93
18.57
13.06
1.57
23.75
US: NASDAQ
15.42
29.88
9.99
4.06
29.92
MSCI Europe
8.47
12.07
9.57
-10.25
14.86
UK: FTSE All Share
3.64
7.48
8.92
-3.13
18.78
UK: FTSE 100
3.60
5.23
7.03
-2.78
17.30
Germany: DAX
15.76
21.40
14.33
-8.82
32.58
France: CAC 40
10.82
16.10
8.19
-17.63
12.64
Netherlands: All Share
16.67
11.59
5.31
-12.99
17.99
Italy: S&P MIB
5.30
18.35
1.65
-27.60
6.38
Switzerland: SMI
3.55
12.56
20.64
-7.28
4.39
Spain: IBEX 35
5.18
22.11
-7.07
-18.48
3.22
Sweden: OMX
21.54
12.22
10.30
-5.47
20.27
Japan: Nikkei
19.94
31.97
24.66
-15.64
6.44
MSCI Asia Pacific ex Japan
12.42
-1.03
9.40
-6.36
13.90
Hong Kong: Hang Seng
13.67
-7.05
11.70
-8.48
13.99
Australia: S&P/ASX 200
11.08
5.04
17.10
-13.62
8.88
China: Shanghai Shenzhen
300
50.25
-18.19
9.40
-18.38
-3.42
Anne D Picker
Chief Economist
Econoday
Important Information
Econoday Inc. is a US company that provides financial commentary and
indicators to industry professionals. All information provided and views
expressed are those of Econoday. Reference in this document to
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