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Jun 1, 2017

Asia, Europe, and U.S. Stock Markets Closings' Reports on June 1, 2017:

Cheang Ming

Stocks in Asia were mixed on Thursday following the release of Caixin PMI data from China, which was at an 11-month low, and as the yuan hit a seven-month high.
The on-shore yuan traded at 6.7987 to the dollar at 3:00 p.m. HK/SIN. The dollar had traded as low as 6.7830 yuan earlier in the session, levels not seen since last November.
Before markets opened in China, the People's Bank of China set the yuan mid-point at 6.8090 to the dollar — its strongest level in seven months according to Reuters. China's central bank lets the yuan spot rate rise or fall a maximum of 2 percent against the greenback, relative to the official fixing rate.
In the offshore market, where the yuan is more freely traded, the currency fetched 6.7518 to the dollar.
"While there remains some politics in play after the Moody's downgrade ... the stronger yuan could be in China's best interest to promote yuan internationalization and attract more investment," OANDA Senior Trader Stephen Innes said in a note.

Akio Kon | Bloomberg | Getty Images
Japan's benchmark Nikkei 225 index jumped 1.07 percent or 209.46 points to close at 19,860.03, while the Kospi reversed earlier gains to trade lower. The Kospi closed the session down 0.12 percent or 2.77 points at 2,344.61.
Down Under, the S&P/ASX 200 finished the session up 0.24 percent or 13.528 points at 5,738.1.
Markets in greater China were mixed. The Hang Seng Index was higher by 0.49 percent at 3:05 p.m. HK/SIN. The Shanghai Composite closed lower by 0.5 percent or 15.4795 points at 3,101.6983 while the Shenzhen Composite fell 1.919 percent or 34.6956 points to finish the session at 1,773.6063.
This followed the release of Caixin manufacturing PMI figures for China in the month of May. The data showed factory activity fell to an 11 month low, coming in at 49.6 compared to the 50.1 forecast.
The Caixin PMI read weighed on the Australian dollar, which fetched as high as $0.7454 earlier on the back of domestic retail sales figures. The Aussie traded at $0.7407 at 2:45 p.m. HK/SIN.
"Today's data is a reminder of what is important for Australia — and it's that a soft China overrides positive domestic data for Australia, as this feeds back into their own growth and inflationary projects," ThinkMarkets Senior Market Analyst Matt Simpson said.
"Whichever (way) you spin it, the Aussie is not in for a good session from here."
Indonesian markets were closed for a public holiday.

209.46 1.07%
HSI HSI 25809.22
148.57 0.58%
ASX 200 S&P/ASX 200 5738.13
13.56 0.24%
SHANGHAI Shanghai 3101.70
-15.48 -0.50%
KOSPI KOSPI Index 2344.61
-2.77 -0.12%
CNBC 100 CNBC 100 ASIA IDX 7586.47
24.43 0.32%
The start of the new month will also bring with it a fair amount of risk for markets to navigate, IG Chief Market Strategist Chris Weston said in a note.
"There will be a reasonable amount of event risk to work through, not just with U.K. elections (June 8), with the ramifications of that event seemingly contained to U.K. assets, but key central bank meetings from the European Central Bank (also June 8) and Federal Reserve (June 14)," Weston said, adding that he was also keeping a focus on "all things Trump" due to the correlation with the dollar.
Meanwhile, annual economic growth figures in India slowed in the quarter ended March, coming in at 6.1 percent. The weaker than expected figures released yesterday reflected the lagged impact of demonetization, Goldman Sachs said in a note.
Oil prices gained after falling 3 percent in the last session. U.S. crude jumped 1.1 percent to trade at $48.85 a barrel while Brent crude gained 1 percent at $51.27.
Against a basket of six major currencies, the dollar ticked higher to trade at at 97.081.
The dollar also gained against the yen. At 2:30 p.m. HK/SIN, the greenback fetched 111.02 yen, off lows around 110.65 seen in the overnight session.
Meanwhile, the British pound edged lower to trade at $1.2844 after fetching as high as $1.2892 earlier in the session. The sterling slipped to a more than one-month low earlier this week.
Stateside, stocks closed slightly lower due to soft performance from financials and concerns over inflation after the Fed's Beige Book was released. Following the release of the Beige Book on Wednesday, the 10-year Treasury yield at one pointdipped below 2.2 percent mark.
Key U.S. economic data is expected after Asian trading hours, with the ADP employment report, ISM manufacturing PMI and auto sales for the month of May due later in the day.

Silvia Amaro, Sam Meredith

European markets closed higher on Thursday, with Italy setting the pace amid a significant upward revision in first-quarter economic growth.
The pan-European Stoxx 600 ended 0.43 percent higher with autos stocks leading the gains. Auto Trader surged towards the top of the European benchmark on Thursday after a Barclays upgrade. The London-based classified advertising business saw its shares jump 4.5 percent in the session.
Vivendi shares closed 2 percent higher. The French media group obtained EU approval earlier this week for its plan to gain control of Telecom Italia. The latter announced Thursday that Vivendi's CEO would become its chairman.
Oil and gas stocks edged higher after fluctuating for much of the session. President Donald Trump is set to decide whether the U.S. will pull out of the global climate accord later on Thursday. Ahead of the announcement, Brent edged up 0.6 percent, to trade at around $51.09 a barrel, while WTI moved 1.03 percent higher to hit $48.83 shortly after the European close.
Looking at individual stocks, Banco Popular hit the bottom of the European benchmark, falling more than 17 percent. A European banking watchdog has said the Spanish bank will have to be wound down if it fails to find a buyer, Reuters reported.
Petrofac slipped over 1.1 percent after Moody's downgraded the stock to "junk" status with concerns that a fraud probe could hamper its ability to win contracts or could result in a heavy fine. Meanwhile, in the U.S., the Dow Jones industrial average and broader S&P 500 index both continued higher on Thursday following strong private jobs data pointed to a robust labor market.

ECB and data

Italy's national statistics bureau said stronger-than-anticipated domestic demand had boosted economic growth in the first three months of the year. The euro zone economy grew 0.5percent in the first quarter, twice as fast as previously indicated by preliminary data posted last week. The FTSE MIB moved 1 percent higher on Thursday.
Data from Nationwide showed Thursday that house prices in the U.K. dropped for a third consecutive month in May for the first time since 2009.
Investors are also watching out for comments from European Central Bank officials after a Reuters report earlier this week indicated that the central bank will kick off tapering discussions next week. Ewald Nowotny, governor of the National Bank of Austria, said Wednesday that inflation rates might remain low in the long term and the ECB's target is likely to be questioned. Jens Weidmann, from the German Bundesbank, is due to speak at 5:00 p.m. London time at the Konstanz Seminar.

Fred Imbert

U.S. equities closed higher on Thursday, the first trading day in June, as Wall Street got ready for the release of the monthly jobs report.
The Nasdaq composite gained about 0.8 percent, hitting intraday and record highs. The S&P 500 also rose nearly 0.8 percent to notch all-time highs, with materials, financials and health care leading advancers. The health care sector also reached its first 52-week high since March 15.
The Dow Jones industrial average rose about 135 points, with UnitedHealth and Goldman Sachs contributing the most gains. The 30-stock index also traded about 25 points away from its intraday record.
Economists polled by Reuters expect the U.S. economy to have added 185,000 jobs last month. But David Kelly, chief global strategist at JPMorgan Funds, said expectations may have increased in the market after a strong report from ADP and Moody's Analytics.
The Thursday report said private payrolls surged by 253,000 in May, easily topping a consensus estimate of 185,000.
"It was a very good, positive surprise. We've had a few negative surprises, so this is definitely against the current," said JPMorgan Funds' Kelly. "Overall, it says the economy is still moving along nicely."
The report from ADP and Moody's is often seen as a preview to the U.S. government's nonfarm payrolls report, which is set for release Friday at 8:30 a.m.
"What the ADP number does is it raises expectations that the jobs report can come at the top end of the range and maybe above the estimate," said JJ Kinahan, chief market strategist at TD Ameritrade.
Traders celebrate on the main trading floor of the New York Stock Exchange (NYSE) as the Dow Jones Industrial Average passes the 20,000 mark shortly after the opening of the trading session in New York, U.S., January 25, 2017.
Brendan McDermid | Reuters
Traders celebrate on the main trading floor of the New York Stock Exchange (NYSE) as the Dow Jones Industrial Average passes the 20,000 mark shortly after the opening of the trading session in New York, U.S., January 25, 2017.
Wall Street had a slew of data to digest Thursday, including weekly jobless claims, which came in at 248,000, above a forecast of 239,000. The ISM manufacturing index for May came in at 54.9, just below an estimate of 55.0. April construction spending fell 1.4 percent with economists forecasting a gain of 0.5 percent.
Auto companies, meanwhile, released monthly vehicle sales throughout the day.
Nevertheless, these data — along with Friday's jobs report — will do little to dissuade the Federal Reserve from raising rates later this month.
"They have been telegraphing their moves clearly," said Jason Thomas, chief economist at AssetMark. "They want to raise rates." Thomas also noted that the central bank feels "vindicated" following the criticism directed for the way it has handled monetary policy in the past few years.
"My sense is that they see themselves in smooth waters right now, but those waters are shallow and there are rocks beneath," he said. "Unemployment is really low, but labor force participation has barely budged."
The Fed is set to meet June 13 and 14, with market expectations for a rate hike at 95.8 percent, according to the CME Group's FedWatch tool.
The Dow, S&P and Nasdaq are coming off solid monthly performances in May. S&P and Nasdaq posted monthly gains of 1.16 percent and 2.5 percent, respectively, while the Dow rose about a third of a percent on the back of a subdued volatility environment.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, broke below 10 six times last month, hitting levels not seen in more than 20 years.
"Investors worry that the relationship between decreasing volatility and increased purchases could morph from a virtuous cycle to self-fulfilling feedback frenzy, leading to a vicious, volatility induced selloff," said Jack Ablin, chief investment officer at BMO Private Bank.
"The extent of a potential downdraft depends on how large the risk-parity investment community is. It's widely believed that the mass of money managed under a risk-parity mandate remains small, although it's a trend worth watching," Ablin said in a note.
Tech stocks were among the best performers as the sector continued to build on its stellar year-to-date gains. Tech has gained nearly 20 percent in 2017. By comparison, consumer discretionary, the second-best-performing sector, is up 12 percent.
"Most of the growth has come from large-cap growth stocks," said Tom Martin, senior portfolio manager at Globalt. "It's still a momentum-driven market that's skeptical about cyclical land."
In corporate news, shares of Hewlett Packard Enterprise slipped more than 6 percent after the firm reported a significant decline in quarterly sales.
Meanwhile, Marathon Petroleum approved an additional $3 billion to its shares repurchase program.
On tap this week:
The Dow Jones industrial average rose 135.53 points, or 0.65 percent, to close at 21,144.18, with UnitedHealth leading advancers.
The S&P 500 gained 18.26 points, or 0.76 percent, to end at 2,430.06, with financials leading all sectors higher.
The Nasdaq advanced 48.31 points, or 0.78 percent, to close at 6,246.83.
About five stocks advanced for every decliner at the New York Stock Exchange, with an exchange volume of 974.08 million and a composite volume of 3.839 billion at the close.
Earnings: Hovnanian
8:30 a.m. Employment
8:30 a.m. International trade