There was little market reaction to the naming of a new Federal Reserve chairman.
United States
Stocks were little moved Thursday as the financial markets studied new details of a Republican plan to cut taxes. The Dow Jones industrials added 0.3 percent while the S&P inched up 0.49 point and the Nasdaq slipped 1.59 points.
Major stock indexes retreated as lawmakers circulated a set of talking points covering the House of Representatives highly anticipated $1.51 trillion package. Investors reacted to proposed caps on the popular mortgage-interest deduction by sending shares in home-building companies like Lennar, D.R. Horton, Toll Brother and Pulte Group tumbling. Lowe’s and Home Depot also declined. Facebook shares fell as investors shrugged off strong quarterly results and worried about the social media company’s spending.
Shares of the electric-car maker Tesla, which tumbled in after-hours trading on Wednesday after the company announced a larger loss than expected for the third quarter, fell further after details of the tax plan were released on Thursday. Under their tax plan, House Republicans also want to end a program that offers buyers of electric-powered vehicles a tax credit of up to $7,500. General Motors, which recently announced plans for 20 new all-electric models by 2023, was lower. But Ford, which has said it plans to add 13 electric vehicles in the near future, increased 0.6 percent.
Apple’s revenue forecast for the holiday shopping-quarter was largely above market expectations, helping allay investor concerns about production delays and supply constraints for the iPhone X, which it will start shipping on November 3.
Newell Brands tumbled after the company, which owns Rubbermaid, slashed its annual forecasts following a shaky third quarter. Teva Pharmaceutical Industries dropped after it lowered its financial outlook for the year.
Starbucks posted a smaller-than-expected rise in quarterly sales at established cafes in the US-dominated Americas region, sending its shares down in after-hours trading. CBS reported a 3 percent rise in third-quarter revenue, driven by higher affiliate and subscription fees.
President Donald Trump named Jerome Powell to follow current chair Janet Yellen as chair of the Federal Reserve. Mr Powell is already a member of the Federal Reserve Board. If approved by the Senate, his four year term will begin February 3, 2018. Stocks and bonds were largely unchanged after the nomination.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$2.15 to US$1,279.20. Copper futures were down 0.10 percent to US$3.14. WTI spot crude was up 48 US cents to US$54.78. Dated Brent spot crude was up 32 US cents to US$60.81. The US dollar was up against the pound but was lower against the euro, yen, Swiss franc and the Canadian and Australian dollars. The Dollar Index was down 0.1 percent. The yields on both the US Treasury 30 year bond and 10 year note were down 2 basis points to 2.83 percent and 2.35 percent respectively.
European markets
Shares were mixed Thursday as investors took a breather after the markets flirted with 2-year highs. The FTSE outperformed the rest of Europe adding 0.9 percent. The SMI edged up 0.1 percent while the CAC and DAX retreated 0.1 percent and 0.2 percent respectively.
As pretty much expected, the Bank of England raised its key monetary policy interest rate for the first time in a decade by 25 basis points to 0.5 percent. At the same time, the Bank kept its asset purchase program at £435 billion. The BoE has an inflation target of 2 percent. Inflation according to the latest consumer price index report was up 3.0 percent on the year as the weaker pound sends import prices higher.
Hugo Boss increased after it raised 2017 sales guidance after reporting a slight increase in third-quarter revenue. Fraport, the owner and operator of Germany's Frankfurt Airport, dropped after reaffirming its fiscal year 2017 outlook. Sanofi fell after the company reported a decline in third quarter profit but confirmed its full-year 2017 guidance for business earnings per share to be broadly stable at constant exchange rates. Playtech plummeted after the online casino games company issued a profit warning, citing slowdowns in certain parts of Asia and problems with the Sun Bingo contract.
Randgold Resources was lower after its third-quarter results came in below forecasts. BT Group retreated after reporting a decline in second quarter profit. RSA Insurance Group was lower after the company booked a provision of £50 million against US and Caribbean hurricane events in the third quarter. Credit Suisse Group rallied in Zurich after the reporting significantly higher profit in its third quarter with strong wealth management results. HSBC and Barclays advanced. Randgold was lower after the miner reported a decline in third quarter production.
Eurozone manufacturing activity expanded at the fastest pace in more than six years in October, according to the final October PMI. The PMI rose to an 80-month high of 58.5 from 58.1 in September. German unemployment declined in October. British construction activity signaled a marginal upturn in October, driven by a solid rise in residential building work according to the UK construction PMI. The index rose to 50.8 in October from 48.1 in September.
Asia Pacific
Most Asian stock indices retreated as investors waited for Thursday’s announcement of the next Federal Reserve chair and Friday’s US October employment report. The US dollar pulled back in Asian trading as lingering uncertainty about the US tax bill overshadowed a mildly hawkish FOMC statement.
Chinese stocks fell slightly on concerns over slowing growth and tighter liquidity before year-end. The Shanghai Composite eased 0.4 percent while the Hang Seng lost 0.3 percent.
The Nikkei was up 0.5 percent and the Topix gained 0.4 percent as Japanese shares hit new 21-year highs even though overall gains remained modest ahead of a long holiday weekend. Honda Motor was higher after the automaker raised its full-year operating profit forecast. Sony rallied to extend Wednesday's gains after forecasting a record profit. Panasonic was down on concerns over Tesla's Model 3 production bottlenecks.
Both the S&P/ASX and All Ordinaries slipped 0.1 percent, dragged down by financials after National Australia Bank said it expects to take a restructuring charge of A$500 million to A$800 million in the first half of 2018. NAB was down after forecasting a rise in costs. The other three banks also declined. Higher metal prices helped lift miners, with BHP Billiton, Fortescue Metals Group, Rio Tinto and South32 all climbing. Australia's foreign trade surplus increased more-than-expected in September.
The Kospi was down 0.4 percent on profit taking after four days of gains. The Sensex slipped 0.1 percent.
Looking forward
Australia posts September retail sales. India, the UK and US post October services PMI. Canada releases September merchandise trade balance and October labour force survey. The US reports September international trade and factory orders, October ISM nonmanufacturing index and October employment situation.
Global Stock Markets
Note — all releases are listed in local time.
