Global markets were mixed, ending a subdued period of gains at the start of the week. Earnings in the US slightly disappointed, driving losses in the region. Europe, the UK and Asia benefitted from rallying commodity prices, albeit Europe closed flat as US struggles weighed late in trading.
US stocks retraced some of the gains made early in the week, with the S&P 500 losing -1.0%, the Dow Jones Industrial Average down -0.7%, and the Nasdaq Composite slipping -1.1%. The pullback comes as a steady rise in long-dated Treasury yields weighed on investor buying appetite, and following disappointing earnings, particularly in the consumer staples sector.
Phillip Morris International plummeted -15.9% after posting weaker than expected revenue. Procter & Gamble shares dropped -4.4% after agreeing to acquire a consumer-health business from Germany’s Merck Group (+0.4%), and after a solid first-quarter result included a loss in market share. Semiconductor makers were hit by news Facebook (+0.3%) is looking at designing its own chips as part of an effort to develop more of its own hardware; shares of major players Qualcomm (-4.5%), Nvidia Corp (-3.6%), Advanced Micro Devices (-2.9%) and Intel (-2.7%) fell as a result. Healthcare stocks continued recent struggles, with shares of Allergan, Gilead Sciences, and Illumina down by -3.4%, -2.0%, and -1.9%. Amazon shares rose +1.7% after announcing Amazon Prime subscriptions topped 100m members world-wide. Shares of American Express climbed +6.7% a day after reporting stronger-than-expected results.
European equities just managed to stay afloat on Thursday. Gains in oil stocks on an extended crude oil price rally were offset by struggles in the US market. The Stoxx Europe 600 closed flat. Oil companies rose across the board, with Tullow Oil, Royal Dutch Shell, and Total SA +3.8%, +1.5%, and +1.2% higher respectively. The UK’s FTSE 100 extended its winning streak to three sessions, adding +0.2% at market close thanks to a boost from gains in miners, despite a disappointing read on UK retail sales. Shares of Evraz and Glencore were +1.6% and +1.1% higher respectively as prices of nickel and aluminium rallied. Shire Pharmaceuticals surged +5.9% after rejecting a US$60bn takeover bid from Takeda Pharmaceuticals (-0.1%). UK tobacco stocks British American (-5.4%) and Imperial Brands (-2.9%) were dragged lower by the weak result from Phillip Morris International.
Asia stocks mostly rose, supported by gains in energy companies and Chinese markets. The Hang Seng (+1.4%), Shanghai Composite (+0.8%) and Kospi (+0.3%) all rose, while the Topix remained flat.
The ASX 200 was up +0.3%, supported by gains in commodity stocks.
WTI crude rose +0.8% to US$69.01 while gold fell -0.2% to US$1,346.47. Iron ore added +US$3.00 to US$68.00/MT.
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