Week Ahead: Fed and BoJ Decisions in Focus

15 Dec 2014
Week Ahead: Fed and BoJ Decisions in
Focus
Summary of key economic events
15 December
16 December
Australia
RBA Minutes of Dec. Meeting
China
HSBC Manufacturing PMI
US
Industrial Production
Japan
Trade Balance
UK
CPI
Retail Price Index
PPI
ONS House Price
Germany
Manufacturing PMI
Services PMI
Composite PMI
ZEW Survey
Eurozone
Services PMI
Composite PMI
Manufacturing PMI
ZEW Survey
Trade Balance
US
17 December
Manufacturing PMI
Australia
RBA FX Transactions
Japan
Machine Tool Orders
Foreign Buying Japan Stocks
China
UK
November Property Prices
Bank of England Minutes
Jobless Claims Change
Unemployment Rate
Employment Change
Eurozone
CPI
Labour Costs
US
MBA Mortgage Applications
CPI
Current Account Balance
Fed Summary of Economic Projections
FOMC Rate Decision
FIL Limited and its subsidiaries are commonly referred to as Fidelity or Fidelity Worldwide
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considering an investment should seek independent advice on the suitability or otherwise of
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18 December
Japan
BOJ Annual Rise in Monetary Base
Bank of Japan Monetary Policy Statement
Cabinet Office Monthly Economic Report for December
UK
Retail Sales
Eurozone
Construction Output
US
Initial Jobless Claims
Continuing Claims
Composite PMI
Services PMI
19 December
Japan
UK
Nationwide Dept Sales
Public Finances
Public Sector Net Borrowing
Germany
PPI
Eurozone
ECB Current Account
Source: Bloomberg
Performance of major stock market indices
End
Index
2013
2014
Daily
Dec 11
Dec 12
16576.7
17596.3
4176.6
4708.2
Percent Change
Change
Daily
2014
Yr/Yr
17280.8
-315.5
-1.8
4.2
9.7
4653.6
-54.6
-1.2
11.4
16.3
North America
United States
Dow
NASDAQ
S&P 500
Canada
S&P/TSX Comp**
1848.4
2035.3
2002.3
-33.0
-1.6
8.3
12.8
13621.6
13905.1
13731.1
-174.1
-1.3
0.8
4.6
Europe
UK
FTSE 100
6749.1
6461.7
6300.6
-161.1
-2.5
-6.6
-2.2
France
CAC
4296.0
4225.9
4108.9
-116.9
-2.8
-4.4
1.2
Germany
XETRA DAX
Italy
MIB
Spain
9552.2
9862.5
9594.7
-267.8
-2.7
0.4
6.5
18967.7
19201.1
18600.8
-600.2
-3.1
-1.9
4.5
Ibex 35
9916.7
10431.8
10145.0
-286.8
-2.7
2.3
9.4
Sweden
OMX Stockholm 30
1333.0
1454.5
1425.9
-28.6
-2.0
7.0
13.6
Switzerland
SMI
8203.0
9058.8
8895.4
-163.5
-1.8
8.4
13.6
Australia
All Ordinaries
5353.1
5207.4
5196.9
-10.6
-0.2
-2.9
1.9
Japan
Nikkei 225
16291.3
17257.4
17371.6
114.2
0.7
6.6
12.8
Hong Kong
Hang Seng
23306.4
23312.5
23249.2
-63.3
-0.3
-0.2
0.0
S. Korea
Kospi
2011.3
1916.6
1921.7
5.1
0.3
-4.5
-2.1
Singapore
STI
3167.4
3318.7
3324.1
5.4
0.2
4.9
8.4
China
Shanghai Comp
India
Sensex 30
Asia/Pacific
2116.0
2925.7
2938.2
12.4
0.4
38.9
33.8
21170.7
27602.0
27350.7
-251.3
-0.9
29.2
32.0
Data Source — Haver Analytics
FIL Limited and its subsidiaries are commonly referred to as Fidelity or Fidelity Worldwide
Investment. Fidelity only gives information about its products and services. Any person
considering an investment should seek independent advice on the suitability or otherwise of
the particular investment. Fidelity, Fidelity Worldwide Investment, the Fidelity Worldwide
Investment logo and the F symbol are trademarks of FIL Limited.
US markets
With yet another sharp drop in oil prices weighing on the markets, stocks moved sharply lower
on Friday. The losses dragged the major averages down to their lowest closing levels in a month.
The Dow Jones industrials dropped 1.8%, the S&P declined 1.6% and the Nasdaq lost 1.2%. For
the week, the indices were 3.8%, 3.5% and 2.7% lower respectively. Concerns about oil demand
led to the continued oil price decline after the International Energy Agency joined OPEC and cut
its outlook for 2015 global oil demand growth.
While lower gas prices may boost consumer spending, the drop in prices will hurt the oil and gas
industry, which had been a major source of growth. Negative sentiment was also generated by
disappointing Chinese data, which added to recent worries about global economic outlook.
Traders largely shrugged off the University of Michigan’s consumer sentiment report. The report
said the preliminary reading on the consumer sentiment index for December jumped to 93.8
compared to the final November reading of 88.8.
Steel stocks dropped partly reflecting concerns about the outlook for demand following the
disappointing Chinese industrial production data. Considerable weakness was also visible among
chemical stocks including Dow Chemical and Eastman. Esterline Technologies led the defense
sector lower after reporting disappointing fourth quarter results. Exxon Mobil and Chevron both
hit 52-week lows. Royal Dutch Shell and BP also were down. Adobe Systems advanced after it
announced plans to buy stock photography company Fotolia, along with a stronger quarterly
report.
Gold at the afternoon London fixing was up 75 US cents to US$1,217.00. Copper futures were up
0.45% to US$2.93. WTI spot crude was down US$2.14 to US$57.81. Dated Brent spot crude was
down US$1.83 to US$61.85. The US dollar was down against euro, yen and Swiss franc. It was
virtually unchanged against the pound. However, it was up against the Canadian and Australian
dollars. The Dollar Index was down 0.3%. The yield on US Treasury 30 year bond was down 9
basis points to 2.74% while the yield on the 10 year note dropped 10 basis points to 2.08%.
European markets
Stocks dropped along with crude oil prices as investors worried about the health of the global
economy. The recent drop in oil prices was once thought mainly the results of oversupply.
However, now OPEC and the International Energy Agency expect global oil demand to decline.
The FTSE was down 2.5%, the CAC declined 2.8%, the DAX dropped 2.7% and the SMI retreated
1.8%. For the week, the FTSE sank 6.6%, the CAC dropped 7.0%, the DAX slid 4.9% and the
SMI declined 3.4%. Continuing jitters stemming from political uncertainty in Greece also added
downward pressure on stock prices.
BASF and SAP declined on broker downgrades. Petrofac, Randgold and Anglo American were also
sharply lower. Commodity and energy stocks, including BG Group, Rio Tinto and BHP Billiton
declined taking the FTSE with them. British house builders were down after analysts said
optimism about the sector appeared to be priced in and valuations had become more stretched
after a rally over the last three months. Persimmon was down on a broker downgrade.
Commerzbank retreated after the Financial Times reported the lender will pay more than US$1
billion to settle allegations that it violated US sanctions and laws against laundering money.
FIL Limited and its subsidiaries are commonly referred to as Fidelity or Fidelity Worldwide
Investment. Fidelity only gives information about its products and services. Any person
considering an investment should seek independent advice on the suitability or otherwise of
the particular investment. Fidelity, Fidelity Worldwide Investment, the Fidelity Worldwide
Investment logo and the F symbol are trademarks of FIL Limited.

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