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Asian Markets at Close Report

European Markets at Close Report

Feb 14, 2017

How Did The Stock Markets Perform Today February 14, 2017: Asia | Europe | Wall Street




marketwatch.com

ASIA


Willa Plank
The strengthening of the yen against the dollar on Tuesday pressured Japan stocks after recent gains, adding to broader uncertainty about the direction of equities following the latest uptick in riskier investments

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As worries cooled last week over geopolitics and where U.S. policy may be headed, the yen, gold and sovereign-debt prices logged declines, while equities and the dollar perked up again. But ahead of U.S. Federal Reserve Chairwoman Janet Yellen’s upcoming congressional testimony, some caution has returned.
The yen moved from around ¥113.75 versus the dollar to below ¥113.50 in an hour, after which the Japan stock market’s lunch break resulted in the Nikkei going from down 0.2% to down 0.8%. The Nikkei NIK, +1.14%  closed down 1.1%.
Read: Dollar softens up as investors wait for Yellen testimony
Singapore’s Strait Times Index STI, +0.49%  closed down 1.4% after three days of gains, as concerns about bank earnings cut into sentiment. Oversea-Chinese O39, +0.11%   dropped 3% following weak fourth-quarter results. DBS D05, +0.60%   and United Overseas Bank U11, +0.00%   which report later this week, fell 2.8% and 1.5%, respectively.
Read: Toshiba to book $6.3 billion U.S. nuclear write-down, delays earnings
Tuesday’s pause in Asian stocks follows some easing of concerns. Recent actions by U.S. President Donald Trump, including his phone call with Chinese President Xi Jinping last week and meeting with Japanese Prime Minister Shinzo Abe over the weekend, soothed worries he would provoke a trade or currency war early in his administration.
Trump’s confirmation of the “One China” policy contributed to the recent positive momentum, said Christoffer Moltke-Leth, director of global sales trading at Saxo Capital Markets. “This is very positive for U.S.-China relations going forward.”
There were also some positive economic data in Asia on Tuesday.
China’s consumer price inflation climbed to a 2½-year high on stronger food prices ahead of the Lunar New Year, official data showed. The consumer price index increased 2.5% in January from a year earlier, compared with a 2.1% gain in December. China’s producer prices rose for the fifth consecutive month, with January’s year-over-year change accelerating to 6.9% from 5.5%.
Australia’s NAB Monthly Business Survey, a key indicator of corporate sentiment there, was also strong. Data exceeded all expectations, TD Securities said. Business conditions hit their strongest level in a decade.
The Aussie dollar AUDUSD, +0.0913%  gained after the report, rising from below US$0.7650 to US$0.7670.
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EUROPE 
 marketwatch.com

Sara Sjolin
European stock markets struggled to extend its winning run on Tuesday, closing only marginally higher after disappointing economic growth from Germany and the eurozone.
The Stoxx Europe 600 index SXXP, +0.02%  ended up 0.07 point at 370.20, enough to keep it at the highest level since December 2015. The small gain also marked a sixth straight day of advances for the pan-European benchmark.
Data deluge: The subdued trading activity Tuesday came as investors digested the latest readings on economic growth for Germany and the eurozone, which both came in weaker than expected. Gross domestic product for Germany expanded by 1.7% in the fourth-quarter, falling short of a 1.8% forecast, while eurozone GDP growth was cut to 0.4% from 0.5%.
Germany’s DAX 30 index DAX, -0.02%  ended near break-even levels at 11,771.81, off 2.62 points, but enough to halt a three-session climb.
France’s CAC 40 index PX1, +0.16%  rose 0.2% to 4,895.82, while the U.K.’s FTSE 100 index UKX, -0.14%  fell 0.1% to 7,268.56.
The London index had earlier traded higher as the pound dropped sharply following inflation data that missed forecasts. Consumer prices rose 1.8% in January, less than the 1.9% expected and staying below the Bank of England’s 2% target.
Read: Why the pound plunged the most in 12 days after U.K. inflation miss
Sterling GBPUSD, -0.1123%  fell to $1.2458 from $1.2517 ahead of the data, as the report was seen as easing pressure on the BOE to lift interest rates.
Yellen testimony: Also in focus on Tuesday, U.S. Federal Reserve Chairwoman Janet Yellen delivered her semiannual congressional testimony on interest-rate policy. The Fed boss offered an upbeat outlook for the U.S. economy, suggesting that rates could be raised at “upcoming meetings”.
“While she stated that waiting too long to hike would be unwise she also acknowledged that the path around fiscal policy remained unclear. Even though she was non-committal about the timing of a rate rise, bond yields spiked on her prepared comments, and pushed the U.S. dollar higher,” said Michael Hewson, chief market analyst at CMC Markets, in a note.
The ICE Dollar Index DXY, +0.02%  rose 0.3% to 101.23.
Movers: Shares of Credit Suisse Group AG CSGN, +2.30% CS, +1.69%  gained 2.3% after the bank posted a bigger-than-forecast fourth-quarter loss, but said it would cut a net of 5,500 jobs in 2017 to cut costs.
Peugeot SA UG, +4.32%  jumped 4.3% after its owner PSA Group said it is in talks with General Motors over a potential acquisition of its European business Opel.
Spectris PLC SXS, +2.72%  climbed 2.7% after the precision instrumentation and controls company raised its dividend by 5%.
Acacia Mining PLC ACA, +8.03%  rallied 8%. The London-listed gold miner said it swung to a pretax profit for the fourth quarter and reported a 13% rise in gold production for 2016.
Next PLC NXT, +0.56%  added 0.6% after the fashion retailer appointed Michael Roney to replace John Barton as chairman.
On a more downbeat note, shares of Electricite de France SA EDF, -2.10%  fell 2.1% after the utility company reported profit that fell short of expectations.
Shares of Rolls-Royce Holdings PLC RR., -3.99% RYCEY, -4.19%  lost 4%, after the aircraft engine maker said it swung to a £4 billion loss in 2016.
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WALL STREET 

 marketwatch.com

Anora Mahmudova, Wallace Witkowski
U.S. stocks notched a fourth straight record close Tuesday with a rally in banks after Federal Reserve Chairwoman Janet Yellen signaled that the central bank could gradually raise interest rates sooner rather than later.
During Yellen’s testimony before the Senate Banking Committee, stocks flipped between small gains and losses but started carving out fresh intraday highs as the testimony wrapped up, adding to three straight days of record closes for the Dow industrials, S&P 500 and the Nasdaq.
The S&P 500 index SPX, +0.40%  finished up 9.33 points, or 0.4%, at a record 2,337.58, with financials and health-care stocks leading the gains. The financials sector has rallied more than 20% since the November election, and 4.2% this month alone. Bank stocks jumped after Yellen’s comments on interest rates, while rate-sensitive sectors such as utilities and real estate slumped.
The Dow Jones Industrial Average DJIA, +0.45%  gained 92.25 points, or 0.5%, to close at a record 20,504.41, with 23 of the 30 blue-chip components trading higher. Shares of Goldman Sachs Group Inc GS, +1.30% closed at a record $249.92, with a 1.3% gain. J.P. Morgan Chase & Co JPM, +1.60%  led gainers with a 1.6% rise.
The Nasdaq Composite Index COMP, +0.32%  rose 18.62 points, or 0.3%, to close at a record 5,782.57.
Some market participants read Yellen’s reference to the Fed raising rates at “upcoming meetings” as indicating that an increase of benchmark rates at the Fed’s March meeting, which Wall Street has been pricing in as unlikely, is still on the table. Central bank officials last lifted the Fed-funds rate in December to a range between 0.50% and 0.75%.
“It appears that [Yellen] is priming the market to expect two or three rate hikes, which has been reflected in higher moves in financials and bond yields,” said Ryan Larson, head of equity trading at RBC Global Asset Management.
Larson also noted the Fed has some degree of hesitation regarding what the fiscal stimulus will look like.
Read: ‘Fed Up’ exposes the elite rot inside the Federal Reserve
Still, there are those who doubt the Fed’s conviction to hike in March.
“The Fed is going to be reactive [rather] than proactive, so we don’t expect the first rate hike this year until May or June,” said Wouter Sturkenboom, senior investment strategist at Russell Investments.
Fed member forecasts for rates suggest that the central bank will raise rates three times in 2017, but the market isn’t expecting an increase before the Federal Open Market Committee’s June meeting, according to CME Group data.
While Yellen’s testimony didn't detract from earlier statements from the central bank, the door is still open for a March rate hike to stick to the Fed’s target of three increases this year, said Mark Kepner, managing director of sales and trading at Themis Trading, in an interview.
“There was a little shift that there could be one in March,” Kepner said. “The market is not strongly considering it, but expectations have nudged up a little bit. The Fed originally said three [rate hikes] so March could be a swing month, but you still have economic numbers and the jobs report and maybe some clarification on tax policies before then.”
See: Live blog recap of Yellen’s testimony
Richmond Fed President Jeffrey Lacker, who is isn’t a voting member of the Federal Open Market Committee, said Tuesday that almost all policy rules are recommending higher interest rates.
Treasury yields, which are sensitive to shifting rate-hike expectations, jumped on Yellen’s comments but have walked back a bit. The 10-year Treasury note TMUBMUSD10Y, +0.36% advanced 3.4 basis points to 2.469%, compared with 2.434% late Monday in New York. Bond yields rise as prices fall, and investors tend to unload bonds in a rising interest-rate environment in anticipation of being able to repurchase government bonds at higher rates in the future.
Read: As euphoria overruns Wall Street, one bank sees S&P 500 at 3,000 by 2019
On the data front, the National Federation of Independent Business’s small-business index for January maintained its postelection surge as business owners remained optimistic about better economic prospects under President Donald Trump’s administration. The Producer Price Index for January jumped by 0.6%, the largest rise since 2012, suggesting inflation may be heating up.
Stocks to watch: More than 10% of companies on the S&P 500 reached 52-week highs, and shares of Apple Inc. AAPL, +1.30% closed at a record for a second day in a row. In addition to shares of J.P. Morgan and Goldman Sachs, shares of Cisco Systems Inc. CSCO, +1.06% Bank of America Corp. BAC, +2.82% Costco Wholesale Corp. COST, +0.97% Morgan Stanley MS, +1.72% American Express Co. AXP, +0.63% and Kraft Heinz Co. KHC, +0.25%  all touched 52-week highs. Outside of the S&P 500, shares of Tesla Inc. TSLA, +0.14%  were not only at a 52-week high but a few dollars away from their all-time high set in September 2014.
Molson Coors Brewing Co. TAP, +3.42% shares closed up 3.5% after earnings results.
Cigna Corp. CI, +0.57% shares closed up 0.6% after the health insurer said it terminated its merger agreement with Anthem Inc. ANTM, -0.12%  and would expand its share buyback program by $3.7 billion. Anthem shares fell 0.1%.
Shares of General Motors Co. GM, +4.84%  rallied 4.8% after the owner of French car maker Peugeot UG, +4.32% the PSA Group, said it is in talks with GM to buy its Opel brand. Shares of Peugeot jumped 3.7% in Paris.
Shares of Mattel, Inc. MAT, +0.63%  closed up 0.6% after news that the toy maker will team up with Alibaba to develop and sell new products for Chinese consumers through Tmall.com.
Shares of GigPeak Inc. GIG, +12.55%  finished up nearly 13% after IDT Inc. IDTI, +0.61%  said late Monday it would buy the communications and video-chip maker in an all-cash $250 million deal.
Read: Tesla could decide to tap capital markets as its shares rally, analyst says