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Compromise Failure for OPEC Officials
29 Nov 2016
Asia: stocks fluctuated after a three-day rally as investors adopted a cautious tone ahead of key events from OPEC talks to the U.S. jobs report and Italy’s referendum. The MSCI Asia Pacific Index rose 0.1% after erasing gains earlier in the day. Japan’s Topix index was little changed after a 12-day surge. Futures on the S&P 500 Index were little changed after the underlying gauge fell 0.5% on Monday. Investors are turning their attention to the OPEC meeting on Wednesday and Italy’s vote on constitutional reform at the weekend with global equities on course to post the biggest monthly gain since July. The Topix is flat after reaching its highest level since the Bank of Japan introduced negative interest rates in January. The gauge’s rally to Monday was its longest winning streak since June 2015. Data on Tuesday showed Japan’s household spending dropped for an eighth straight month and retail sales fell slightly in October, underscoring weak domestic consumption. The unemployment rate remained at the lowest in two decades. Australia’s S&P/ASX 200 Index rose 0.3% and New Zealand’s S&P/NZX 50 Index dropped 0.3%. South Korea’s Kospi index was little changed. Samsung Electronics Co. rose 0.4%. The smartphone maker said it will increase cash returns to shareholders, add at least one outside director and review its corporate structure, adopting some of the changes proposed by activist investor Elliott Management Corp. The Hang Seng Index lost 0.1% while a gauge of Chinese shares traded in Hong Kong dropped 0.3%, holding near a seven-week high as railway companies and banks extended gains. The Shanghai Composite Index climbed 0.5%, with the gauge trading at the highest since January.
U.S Equities: fell the most in four weeks as investors speculated that gains sparked by expectations for brisker economic growth under a new administration went too far too quickly. Financial shares that have paced a three-week surge since the election fell 1.4% on Monday, after the value of American financial firms was inflated by more than $300 billion since Nov. 8. Consumer discretionary shares slipped after the start of the holiday sales season was lack luster. Utility stocks climbed 2% as a rout in bonds eased. The S&P 500 Index lost 0.5% to 2,201.82 at 4 p.m. in New York, halting a four-day advance that left the equity benchmark at a record. It had gained 3.4% since the U.S. presidential election on Nov. 8. The Dow Jones Industrial Average slipped 52.80 points to 19,099.34. Equities had rallied while bonds plunged on speculation Donald Trump will be able to implement fiscal stimulus to jump start growth in the world’s largest economy. Investors will turn attention to U.S. jobs data due Friday for clues on the pace of future interest-rate increases, while OPEC nations continue to work toward a deal to curb production. A referendum Sunday in Italy also has cooled demand for riskier assets. 6 of 11 sectors negative. Financials -0.96%, Health care -0.78%, consumer discretionary -0.61%, industrials -0.54%, energy -0.44%, materials -0.38%. Tech +0.1%, consumer staples +0.26%, REITs +0.4%, telecom +0.84%, utilities +1.87%
Commodities: Oil traded near $47 after OPEC officials failed Monday to work out a compromise on a deal to cut production and boost crude prices. Gold held the biggest advance in two months as the dollar slipped and concerns over Italy’s upcoming referendum stoked demand for haven assets.
Zinc, lead and copper retreated in London as the best monthly rally for industrial metals in more than seven years faltered on signs that prices had risen too far, too fast.