European Shares Sink As Spain Slips Into A Recession

Asian markets opened the week solidly, led by Hong Kong’s Hang Seng, which rallied 1.7% to 21094, a 6-week high. The ASX 200 climbed .8% to 4397, and the Kospi gained .3% to 1982. Markets in Japan and mainland China were closed for holidays.

GDP data from Spain showed the economy shrunk by .3% in the first quarter, indicating it had slipped into a recession. The news sent the IBEX down 1.9%, and pressured European stocks across the region. The CAC40 fell 1.6%, the FTSE dropped .7%, and the DAX slid .6%.

France's CAC40 Drops 1.6%

US stocks snapped a 4-day winning streak, closing moderately lower. The Dow erased 15 points to 13214, the S&P 500 shed .4% to 1398, while the Nasdaq skipped .7% to 3046.

Currencies

The Dollar traded mostly higher on Monday. The Euro eased .1% to 1.3232, and both the Pound and Swiss Franc declined .2%. The Australian Dollar sank .5% to 1.0415 ahead of the central bank’s rate decision, and the Canadian Dollar dropped .6%, following disappointing GDP data. The Japanese Yen rallied .6%, breaking through the 80 price barrier to 79.83.

Economic Outlook

Midwest business activity slowed last month according to the Chicago PMI report, which fell to 56.2 from 62.2. Personal income rose .4%, more than expected, while personal spending rose .3%, less than expected.

Dow Closes at Highest Level Since December 2007

Equities

Australia’s central bank, the RBA, cut interest rates by 50 basis points, more than expected, pushing up the ASX 200 by .8%. In contrast, the Nikkei tumbled 1.8% to 9351, as the recent advance in the Yen weighed on exporters. Honda and Toyota both fell more than 3.4%, and Sharp plunged 9.3% after releasing a disappointing outlook. Markets in greater China were closed for holidays. Factory activity in China rose to a 13-month high, according to the April PMI report.

Most European markets were closed for May Day holidays, but in the UK, the FTSE rallied 1.3% on light volume. Lloyd’s spiked 8.3% after releasing upbeat earnings, with profit more than doubling during the first quarter.

The Dow climbed to a 4-year high, ticking up 66 points to 13279, as US stocks gained. The S&P 500 climbed .6% to 1406, and the Nasdaq edged up .1% to 3050.

Currencies

The Australian Dollar slumped .9% to 1.0330, more than erasing the previous session’s gains, while most other currencies traded in narrow ranges. The Euro and Swiss Franc both eased less than .1%, and the Pound slipped .1% to 1.6217. The Yen declined .4% to 80.12, and the Canadian Dollar ticked up .1% to .9859.

Economic Outlook

Manufacturing activity increased to 54.8 from 53.4 according to the ISM’s PMI report. Construction spending rose less than expected, inching up .1% vs. forecasts for a .5% gain. Total auto sales were flat from last month at 14.4M, slightly below expectations.

Employment Data for Europe and US Disappoints

Equities

Asian markets advanced on Wednesday, following Tuesday’s upbeat factory data from the US and China. In greater China, the Shanghai Composite surged 1.8% to 2438, after returning from a 2-day holiday, and the Hang Seng rallied 1% to 21309. The Nikkei rose .3% to 9380, the Kospi climbed .9% to 1999, and the ASX 200 inched up .1% 4436, closing at a 9-month high.

European markets traded mostly lower, as unemployment in the Euro zone jumped to 10.9%, its worst level in 15 years. Banks led the declines, dropping 2.9%. The FTSE fell .9%, the DAX dropped .8%, while the CAC40 bucked the trend, rising .4%. Indexes in debt-laden Spain and Italy fell 2.6%.

US stocks opened down following a disappointing employment report from ADP, but largely recovered throughout the day. The Dow slipped 11 points to 13269, the S&P 500 eased .3% to 1402, while the Nasdaq gained .3%.

Currencies

European currencies fell, as the Euro and Swiss Franc both declined .6%, and the Pound eased .1% to 1.6201. Meanwhile, the Australian Dollar, Canadian Dollar and Yen all traded fractionally lower.

Economic Outlook

The ADP employment report showed a gain of 119K jobs last month, far below the 178K expected by analysts. The report is generally seen as a barometer for the official non-farm payroll report which will be released on Friday. Adding to the negativity , factory orders fell by 1.5%, their biggest drop in 3 years, but the results were in line with estimates.

ISM Data Disappoints, Pushing Down Stocks

Equities

Asian markets posted narrow losses following Wednesday’s disappointing economic news from the West. The Kospi and ASX 200 both declined .2%, and Hong Kong’s Hang Seng dropped .3%, as Chinese banks dropped. Bucking the slide, China’s Shanghai Composite inched up 2 points to 2440. Markets in Japan were closed for a holiday.

European markets traded mixed, after the ECB said it would hold rates at 1%, and revealed that the bank had not discussed further rate cuts. The FTSE rose .2%, while the DAX dropped .2% and the CAC40 slipped .1%. Societe General shares tumbled 4.2% despite a positive earnings report.

US stocks fell, led by the Nasdaq’s sharp 1.2% drop to 3024. The S&P 500 shed .8% to 1392, and the Dow declined 62 points to 13207. Disappointing ISM data pressured stocks, outweighing a positive weekly unemployment report.

Currencies

The Australian Dollar slumped .7% to 1.0258, as a drop in metals prices hit the commodity currency. The Pound and yen both eased .1% to 1.6178 and 80.21 respectively, while the Euro and Swiss Franc traded fractionally lower.

Economic Outlook

The ISM non-manufacturing index fell to 53.5 from 56, well below forecasts for 55.5. Weekly unemployment claims fell to 365K, a big jump from last week’s 392K.

Stocks and Energy Tumble as Payroll Data Falls Short

Equities

Asian markets traded mostly lower ahead of the key US payroll report. The Hang Seng fell .8% to 21086, the ASX 200 dropped .7%, and the Kospi eased .3% to 1989. China’s Shanghai Composite once again gained, in anticipation of a new round of government easing. Markets in Japan remained closed for a holiday.

Weaker than forecast US jobs data sent Western shares sharply lower. The non-farm payroll report indicated the economy had added just 115K jobs, significantly weaker than the 170K expected.

The FTSE and CAC40 both dropped 1.9%, and the DAX slumped 2%. Nokia shares tumbled 7.3% after the board elected a new chairman on Thursday.

The Dow dropped for its 3rd straight session, erasing 168 points to 13038. The Nasdaq tumbled 2.3% to 2956, and the S&P 500 dropped 1.6% to 1369.


Nasdaq Sinks 2.3%

LinkedIn surged 7.2% after beating forecasts on both profits and revenue, prompting multiple upgrades.

Currencies

The Dollar traded higher as traders shifted into “risk off” mode. The Australian Dollar sank .8% to 1.0188, and the Canadian Dollar dropped .6% to .9952. The Euro and Swiss Franc both dropped .5%, while the Pound eased a modest .2%. The Japanese Yen benefited from the flight to safety, climbing .4% to 79.87.

Economic Outlook

Despite the disappointing payroll number, the unemployment rate improved slightly, slipping to 8.1%, its best level since 2009. In Canada, the Ivey PMI report clocked in at 52.7, far below estimates of 62.6.