Stocks plummet globally — except Nasdaq

Stocks plummet globally — except Nasdaq

US stocks staged a late day rally that left them still down on the day on a report that the Fed might pause from interest rate increases. The Dow Jones industrials were down 0.3 percent, the S&P lost 0.2 percent but the Nasdaq rebounded 0.4 percent.

US markets

US stocks staged a late day rally that left them still down on the day on a report that the Fed might pause from interest rate increases. The Dow Jones industrials were down 0.3 percent, the S&P lost 0.2 percent but the Nasdaq rebounded 0.4 percent. The rebound was partly attributed to a report from the Wall Street Journal indicating Federal Reserve officials are considering signaling a "wait-and-see mentality" after a likely interest rate increase later this month.

Citing recent interviews and public statements, the Journal said Fed officials still think interest rates will move broadly higher in 2019, but they are reportedly becoming "less sure how fast they will need to act or how far they will need to go."

OPEC tentatively agreed to an oil output cut but was waiting for a commitment from non-OPEC member Russia before deciding the exact volumes for a production reduction aimed at propping up crude prices according to sources. Russian Energy Minister Alexander Novak flew home from Vienna earlier for talks with President Vladimir Putin. Novak will return to Vienna on Friday.

Traders were also reacting to a slew of US economic data — several reports originally due to be released on Wednesday were postponed due to former President George H.W. Bush's funeral. ADP said private sector employment climbed by 179,000 jobs in November after jumping by a downwardly revised 225,000 jobs in October. First-time unemployment claims edged down by 4,000 to 231,000, a decrease of 4,000 from the previous week's revised level of 235,000. The October trade deficit widened to $55.5 billion — its highest level in 10 years.

These data reflect observations at 4:00 PM US ET. Gold was up 70 US cents to US$1,243.30. Copper futures were down 0.97 percent to US$2.75. WTI spot crude was down US$1.17 to US$51.72. Dated Brent spot crude was down US$1.29 to US$60.27. The US dollar was up against the Australian dollar. It retreated against the yen, euro, Swiss franc and pound and was virtually unchanged against the Canadian dollar. The yield on the US Treasury 30 year bond was down 2 basis points to 3.15 percent while the 10 year note was down 3 basis points to 2.88 percent.

European markets

European stocks tumbled Thursday, extending the losses from the previous two days. Falling crude oil prices and concerns over the trade tensions between the US and China following the arrest of the chief financial officer of Huawei Technologies weighed on the markets. Huawei CFO Meng Wanzhou was arrested in Canada on suspicion of violating US trade sanctions against Iran and faces possible extradition to the US. The development has added to uncertainty about whether the 90-day trade truce negotiated by President Donald Trump and Chinese President Xi Jinping will give the two sides enough time to reach a long-term deal.

The FTSE and SMI were down 3.1 percent while the CAC and DAX slid 3.3 percent and 3.5 percent respectively. Bayer was lower despite setting ambitious growth and margin targets through 2022. Capgemini sank after its board decided to co-opt Laura Desmond as a new director. Latecoere plunged after cutting its 2019 earnings outlook. Sanofi dropped on reports that it plans to cut 670 jobs in France by end 2020.

DS Smith tumbled after it unveiled plans to sell its plastics division. AstraZeneca dropped after it announced that it has completed an agreement with Switzerland-based Covis Pharma to sell its rights to the medicines Alvesco (ciclesonide), Omnaris and Zetonna. Dialight, a provider of sustainable LED lighting for industrial applications, sank after warning the delays in raw material supplies adversely impacted November results. Crédit Suisse, Julius Baer and UBS dropped. Swiss Re and Zurich Insurance along with Swiss Life retreated. Novartis, Roche and Nestle were lower.

Germany's manufacturing orders increased for a third straight month in October. Factory orders were up 0.3 percent from September.

Asia Pacific Markets

Asian stocks retreated again Thursday as the arrest of a senior Huawei executive over potential violation of US sanctions on Iran raised more questions about the Trump administration's overall China strategy. The recent drop in U.S. 10-year Treasury yields, Brexit-related uncertainty and caution ahead of a crucial meeting of the Organization of Petroleum Exporting Countries (OPEC) also weighed on markets. The Shanghai Composite tumbled 1.7 as the arrest of Huawei CFO dealt a blow to hopes of any easing of Sino-US trade tensions. The Hang Seng was 2.5 percent lower.

The Nikkei and Topix were down 1.9 percent and 1.8 percent respectively with chip-related stocks coming under heavy selling pressure, as the arrest of an executive of Chinese tech giant Huawei resulted in a flare-up in tensions between the world's two largest economies. Tech stocks paced the declines on concerns that they might be hurt seriously in view of security concerns over the Chinese telecoms group Huawei. Tokyo Electron, Advantest and Sumco Corp were lower. SoftBank Group Corp plummeted on news of mobile service disruption across central Japan. Mobile phone parts maker TDK Corp and Anritsu retreated. Bank of Japan Governor Haruhiko Kuroda told parliament that economic risks from abroad could be severe and the central bank would respond appropriately as needed.

Both the S&P/ASX and All Ordinaries slipped 0.2 percent. Banks ANZ and NAB were lower on concerns over the inversion in the yield curve. Weak base metals prices on global growth concerns pulled down miners including BHP, Fortescue Metals Group and Rio Tinto. Energy stocks also ended broadly lower as oil prices declined ahead of an OPEC meeting to discuss cutting output. October seasonally adjusted merchandise trade surplus was A$2.316 billion — down 21 percent from the previous month. That was shy of expectations for a surplus of A$3.00 billion. October retail sales were up a monthly 0.3 percent.

The Kospi was down 1.6 percent. The Sensex was 1.6 percent lower.

Looking forward

Japan releases October household spending. China releases November merchandise trade balance. Over the weekend, China releases November consumer and producer price indices. Germany and France post October industrial production. The Eurozone releases third quarter GDP. Canada posts November labour force survey. In the US, November employment situation and December preliminary consumer sentiment will be reported.

Global Stock Markets

    End 2018 Daily Percent Change
  Index 2017 Dec 5 Dec 6 Change Daily 2018 Yr/Yr
North America                
United States Dow 24719.22 * 24947.67 -79.40 -0.3 0.9 3.0
  NASDAQ 6903.39 * 7188.26 29.83 0.4 4.1 5.5
  S&P 500 2673.61 * 2695.95 -4.11 -0.2 0.8 2.2
Canada S&P/TSX Comp 16209.13 15182.64 14937.00 -245.64 -1.6 -7.8 -6.7
                 
Europe                
UK FTSE 100 7687.77 6921.84 6704.05 -217.79 -3.1 -12.8 -8.4
France CAC 5312.56 4944.37 4780.46 -163.91 -3.3 -10.0 -11.2
Germany XETRA DAX 12917.64 11200.24 10810.98 -389.26 -3.5 -16.3 -17.1
Italy MIB 21853.34 19328.70 18643.83 -684.87 -3.5 -14.7 -17.0
Spain Ibex 35 10043.90 9012.20 8764.50 -247.70 -2.7 -12.7 -14.6
Sweden OMX Stockholm 30 1576.94 1478.96 1436.66 -42.30 -2.9 -8.9 -10.2
Switzerland SMI 9381.87 8939.96 8660.03 -279.93 -3.1 -7.7 6.6
                 
Asia/Pacific                
Australia All Ordinaries 6167.29 5749.10 5736.71 -12.39 -0.2 -7.0 -5.4
Japan Nikkei 225 22764.94 21919.33 21501.62 -417.71 -1.9 -5.5 -4.4
  Topix 1817.56 1640.49 1610.60 -29.89 -1.8 -11.4 -9.8
Hong Kong Hang Seng 29919.15 26819.68 26156.38 -663.30 -2.5 -12.6 -7.6
S. Korea Kospi 2467.49 2101.31 2068.69 -32.62 -1.6 -16.2 -16.0
Singapore STI 3402.92 3155.92 3115.52 -40.40 -1.3 -8.4 -8.1
China Shanghai Comp 3307.17 2649.80 2605.18 -44.62 -1.7 -21.2 -20.4
Taiwan TAIEX 10642.86 9916.74 9684.72 -232.02 -2.3 -9.0 -6.5
India Sensex 30 34056.83 35884.41 35312.13 -572.28 -1.6 3.7 7.2
*Markets closed              

Data Source — Haver Analytics

Bond markets

10-Yr Govt BondsClosing YieldChange Yield (bp)
US 2.88% -3
UK 1.24% -7
Germany 0.23% -4
Japan 0.05% -1
Australia 2.45% -5

Source — Bloomberg

Currencies and commodities

CurrencyDec 5Dec 6Change (%)
Japanese yen 113.2400 112.7600 0.4%
Australian dollar 0.7266 0.7235 -0.4%
Yuan 6.8568 6.8827 -0.4%
Euro 1.1340 1.1375 0.3%
British pound 1.2730 1.2781 0.4%
Swiss franc 0.9980 0.9937 0.4%
Canadian dollar 0.7475 0.7476 0.0%

Source — Bloomberg 

CommoditiesDec 6Change
Brent Spot $60.29 -2.06%
Gold $1,243.30 $0.70
Thompson-Reuters/ Jeffreys Commodity index 187.56 -1.33%

Source — Bloomberg 

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