With few new economic reports and the US Thanksgiving holiday Thursday, trading is expected to be light.
United States
US stocks advanced Monday. With no major earnings and few economic reports scheduled this week, trading volumes were thin. They are expected to get even thinner prior to the Thanksgiving holiday on Thursday and an early market close on Friday.
Verizon was higher after a broker upgrade. Cavium touched a record high after Marvell said it would buy the company for about $6 billion. Shares of both companies rallied. Time Warner slid after reports the Justice Department will sue to prevent AT&T from buying Time Warner. Merck and Bristol-Myers declined after Roche announced positive trial results for a competing cancer drug. Caterpillar rallied. Marathon Oil and Range Resources declined along with the price of crude.
The Conference Boards’ October index of leading US economic indicators in the month of October surged up 1.2 percent after inching up by a revised 0.1 percent in September.
Federal Reserve Chair Janet Yellen said today that she will leave her seat on the Fed’s Board of Governors once Jerome Powell is confirmed and sworn in to replace her. Yellen’s term as Fed chief ends in February, but she technically could continue serving out a separate appointment as a Fed governor until 2024. Keeping with past practice, Yellen in a letter to President Donald Trump said she would resign when Powell is sworn in, and in the meantime “will do my utmost to ensure a smooth transition.”
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$1.85 to US$1,286.20. Copper futures were up 0.65 percent to US$3.11. WTI spot crude was down 46 US cents to US$56.09. Dated Brent spot crude was down 56 US cents to US$62.16. The US dollar was up against the yen, euro, Swiss franc, and the Canadian and Australian dollars. It retreated against the pound. The Dollar Index was up 0.1 percent. The yield on the US Treasury 30 year bond was unchanged at 2.78 percent while the 10 year note was up 2 basis points to 2.36 percent.
European markets
Although getting off to a weak start Monday, stock indices managed to end the day with gains. Early weakness was due to German political uncertainty where talks to form a coalition government failed after the Free Democratic Party pulled out of negotiations with Angela Merkel's conservative bloc. Talks between Merkel's conservatives, the liberal Free Democrats (FDP) and Greens collapsed just before Sunday midnight due to differences over refugee and climate policy and other issues. Merkel met President Frank-Walter Steinmeier President Frank-Walter Steinmeier to formally inform about the collapse of talks. The FTSE edged up 0.1 percent, the CAC gained 0.4 percent, the DAX advanced 0.5 percent and the SMI rallied 1.3 percent.
Eurozone's economic recovery remains strong, but inflation is yet to show a sustained upward trend, and the European Central Bank's decision in October to reduce the size of asset purchases and continue them for another nine months will ensure that the economy is supported by the right amount of monetary stimulus, ECB President Mario Draghi said Monday. "The re-calibration of our policies for the period beyond the end of this year is meant to preserve the degree of monetary stimulus that is still necessary to secure a sustained return of inflation rates towards levels below, but close to, 2 percent in the medium term," Draghi said at a hearing of the European Parliament's economic and monetary affairs committee in Brussels.
RWE advanced after it was reported that the company was looking at ways to cut its stake in Innogy. Innogy shares were higher as well. DBV Technologies jumped after the company announced positive results from the trial of a treatment for Peanut-Allergic patients. Natixis declined after the bank launched new targets for its strategic plan. Rolls-Royce advanced after reports that it is seeking buyers for L'Orange. Altice was up in Amsterdam after the telecoms company said it is not in preparation of cash raising by means of an equity- or equity-linked issuance. Roche jumped in Zurich after the drug-maker announced a pair of positive drug trial results. Nestlé also finished higher but Novartis slid. Julius Baer advanced after posting better than expected results. Credit Suisse advanced while UBS was lower.
Asia Pacific
Stocks in the Asia Pacific were mostly lower Monday thanks to US tax reform uncertainty and the German political impasse. Investor risk appetite was dented and helped spur demand for safe-haven assets.
The Shanghai Composite reversed early losses to end 0.3 percent higher. Banks paced the gains after Beijing moved to rein in risks from asset management products. The Hang Seng was up 0.2 percent.
The Nikkei and Topix tumbled 0.6 percent and 0.2 percent respectively after the yen strengthened and October Japanese export growth weakened unexpectedly. Exports were up 14.0 percent while imports increased 18.9 percent from a year ago. Financials and tech stocks led the declines with Nomura Holdings, Tokyo Electron and Advantest retreating. Toshiba dropped on equity dilution worries. Toyota Motor and Suzuki Motor advanced after they announced a tie-up to sell electric vehicles in India.
Both the S&P/ASX and All Ordinaries were 0.2 percent lower, dragged down by financials given the uncertainty prevailing over the fate of US tax reform efforts and as investors awaited the Reserve Bank of Australia’s minutes from its November meeting. The big four banks declined along with miners Fortescue Metals Group and South32.
The Kospi was down 0.2 percent. The Sensex inched up 0.1 percent.
Looking forward
The Reserve Bank of Australia publishes minutes from its policy meeting held earlier this month. UK CBI industrial trends for November will be released. October existing home sales will be reported in the US.
Global Stock Market Recap
Note — all releases are listed in local time.
