Foreign Stock Roundup: Vale, AB InBev Impress, Royal Bank Of Scotland Disappoints

Global stocks traversed another turbulent week marked by President Trump’s surprise tariff announcement. The upcoming imposition of tariffs on U.S. steel and aluminum imports led to losses on Wall Street as well as across the world. Additionally, the new Fed Chair indicated that the pace of rate hikes would likely be quickened, dampening investor sentiment further. Stocks in Asia were also weighed down by dismal China manufacturing PMI data.

STOXX Suffers on Powell’s Comments, U.S. Trade Tariffs

Markets across Europe closed in the black last Monday. The STOXX 600 gained 0.6% with all major sectors and exchanges finishing in the green. The FTSE 100 was the highest gainer, increasing 0.6%. Basic resources stocks advanced 1.4% with Anglo American (OTC:NGLOY) gaining more than 3%. Tech stocks were among the region’s leading performers gaining around 1% by the close.

The STOXX 600 declined 0.2% last Tuesday following a volatile trading session. Corporate developments dominated proceedings even as investors keenly awaited new Fed Chair Jerome Powell’s testimony to Congress. The FTSE 100, DAX and CAC 40 declined 0.1%, 0.3% and 0.01%, respectively. Media stocks were the day’s top performers following reports that Comcast (NASDAQ:CMCSA) was aiming to acquire Sky.

Stocks across Europe finished in the red last Wednesday after Fed Chair Powell stated that an increase in the pace of rate hikes was increasingly likely. The STOXX declined 0.7% with all major sectors and exchanges closing in the red. Only media and tech stocks notched up gains, increasing by 0.05% and 0.07%, respectively. Basic resources suffered the worst losses, ending the day 2.3% lower.

The STOXX 600 declined 1.3% last Thursday with nearly all major sectors experiencing significant losses. Europe’s stocks plummeted to a two-week low in intra-day trade. The DAX, CAC 50 and FTSE 100 declined 2%, 1% and 0.8%, respectively. Among the worst losers for the day were media stocks which declined more than 2% following dismal earnings numbers.

On last Friday, President Trump’s decision to impose tariffs on steel and aluminum sparked fears of a possible trade war. This development weighed on Europe’s stocks with the STOXX 60 losing 2.1%. Over last week, the benchmark index declined 3.7%. Nearly all major sectors finished in the red with many of them losing more than 2%. The FTSE 100, CAC 40 and DAX lost 1.5%, 2.4% and 2.3%, respectively.

Asia’s Stocks Lose on Dismal China PMI, U.S. Tariffs

Asia’s stocks finished in the green on last Monday after Wall Street notched up gains even as bond yields declined from recently experienced four-year highs. The Nikkei 225 advanced 1.2%. The Kospi gained 0.3% while the ASX 200 increased 0.7% to end the day above the 6,000 mark. The Shanghai Composite and the Shenzhen Composite gained 1.3% and 2.3%, respectively. The CSI 300 added 1.2%.

Stocks listed on mainland China ended in the red last Tuesday. The Shanghai Composite and the Shenzhen Composite declined 1.1% and 0.3%, respectively. The blue-chip heavy CSI 300 lost 1.5%. However, the tech heavy Chi-Next index added around 1%. The Nikkei gained 1.1% while the Kospi lost out on early gains to close 0.1% lower. The ASX 200 inched up 0.2% by the close.

Dismal manufacturing data from China led to Asia’s stocks closing lower last Wednesday. Fed Chair’s Powell’s comments also weighed on the region’s bourses. The Nikkei lost 1.4%, curbing recent advances. The Kospi and the ASX 200 declined 1.2% and 0.7%, respectively. The Shanghai Composite moved nearly 1% lower but the Shenzhen Composite overcame early losses to gain 0.2%. The Chi-Next added 0.4%.

Stocks across Asia ended mixed last Thursday after ending February with losses. Loss on Wall Street triggered declines in Australia and Japan even as China stocks gained. The Nikkei 226 declined 1.6% to hit its lowest point since mid-February. The ASX 200 lost 0.7%. The Shanghai Composite and the Shenzhen Composite gained 0.4% and 1.2%, respectively. The CSI 300 advanced 0.6%.

President Trump’s decision to impose tariffs on steel and aluminum imports weighed on Asia’s stocks last Friday. The Nikkei 225 lost 2.5% even as the yen gained. Japan’s steel and auto stocks suffered heavy losses with Honda (NYSE:HMC) and Toyota (NYSE:TM) losing 3.8% and 2.4%, respectively. The Kospi and the ASX 200 lost 1% and 0.7%, respectively. The Shanghai Composite and the Shenzhen Composite declined 0.6%.

U.S. Tariffs, Powell’s Comments, NAFTA Fears Weigh on Bovespa

Chile’s large-cap IPSA index was the heaviest loser among Latin America’s equity gauges last Monday. The index lost 1.3% after shares of lithium miner Sociedad Quimica y Minera de Chile S.A. (NYSE:SQM) declined by nearly 3% after Morgan Stanley (NYSE:MS) lowered the stock’s rating. The Bovespa gained 0.4%.

Latin America’s stocks suffered losses on last Tuesday after the new Fed Chair Jerome Powell also said that U.S. inflation would increase prompting investors to predict that four rate hikes were increasingly possible in 2018. Consequently, Mexico’s IPC index and the Bovespa lost 0.9% and 0.7%, respectively.

The IPC index lost 1.3% last Wednesday even as Mexico’s stocks declined 6% over February. This was their worst monthly performance since September 2011. Disappointing earnings releases came to a close amid tense discussions aimed at saving NAFTA. The Bovespa lost 1.7% but managed to record a monthly increase of around 1%.

The Bovespa and the IPC index each gained 0.3% last Thursday. Investors across the region remained nervous following Powell’s hawkish comments. Brazil’s benchmark index lost 0.9% on last Friday after President Trump’s tariff plan triggered profit taking among investors. Shares of Vale declined more than 3%.

Stocks in the News

Vale S.A.’s (NYSE:VALE) fourth-quarter 2017 adjusted earnings of 36 cents per share surpassed the Zacks Consensus Estimate of 23 cents. However, the bottom line came in lower than the year-ago tally of 52 cents per share.

For 2017, adjusted earnings came in at $1.35 per share, outpacing the Zacks Consensus Estimate of $1.22. The bottom line came in higher than the year-ago tally of 96 cents per share.

Net operating revenues edged down 1.1% year over year to $9,167 million. Net operating revenues for 2017 came in at $33,967 million, up from $27,488 million recorded in the year-ago period.

In the fourth quarter, cost of goods sold totaled $5,791 million, up 13.5% year over year. Gross profit margin came in at 36.8%, contracting 810 basis points (bps) year over year. The stock has a Zacks Rank #2 (Buy). You can see Original post

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Written By: Zacks Investment Research