Foreign Stock Roundup: WPP 1H17, BHP Billiton Fiscal 2017 Results Impress

Foreign markets remained focused on the outcome of the annual economic symposium at Jackson Hole last week. Meanwhile, events at the White House weighed on investors. Military drills held jointly by the U.S. and South Korea weighed on Asia’s investors for a while until they chose to ignore the issue. Sales of state-owned assets boosted stocks appreciably in Brazil while Chile’s stocks closed at a record level after the Fed Chair refrained from commenting on U.S. monetary policy in her speech at Jackson Hole.

European Investors Focus on Jackson Hole

Geopolitical concerns weighed down Europe’s markets on Monday with only mining stocks helping to curb the day’s losses. The STOXX 600 lost 0.4% with nearly all sectors and major exchanges in the red. Europe’s bourses were affected by the reverses suffered by their Asian counterparts following joint U.S. and South Korean military drills. Banks were the worst sufferers with Europe’s banking index declining in excess of 0.9%.

The STOXX 600 rebounded on Tuesday, gaining 0.8%, as investors keenly awaited the outcome of the annual Jackson Hole conference. Stocks of basic resources companies were the largest gainers, moving up in excess of 1.7% on a rise in metal prices and encouraging earnings results. Meanwhile, Germany’s economic sentiment index declined more than expected, falling from 17.5 in July to 10 in August.

Stocks across Europe closed lower on Wednesday after media stocks suffered losses and overall sentiment took a hit. The STOXX 600 declined by 0.5% with most sectors closing in the red. Media stocks were the most grievously affected, losing in excess of 2.7% following disappointing earnings news. The largest advertising group on a global basis, WPP (LON:WPP) plc (NASDAQ:WPPGY) , lost 11% after reducing its full-year outlook for net sales.

The STOXX 600 gained 0.3% on Thursday as investors continued to wait for clues on global monetary policy from the Jackson Hole meet. Materials and construction stocks notched up the largest gains for the day. In the U.K., private consumption growth declined more than expected during the second quarter. Meanwhile, business sentiment in France touched its highest level in 10 years during the month of August.

Europe’s stocks broadly declined on Friday even as Janet Yellen delivered the first of a number of speeches from central bankers at the Jackson Hole economic symposium. The STOXX 600 closed the day with losses but still managed to increase 0.2% over last week. However, France’s CAC, the FTSE and Germany’s DAX remained virtually unchanged over this period. Basic resources were among the few gainers for the day, boosted by a spike in prices of copper.

Get The News You Want

Read market moving news with a personalized feed of stocks you care about.

Get The App

U.S. Political Events, Jackson Hole, Military Drill Guide Asian Stocks

Markets across Asia closed mixed on Monday as investors remained focused on events at the White House and military drills held jointly by the U.S. and South Korea. The Nikkei 225 lost 0.4% after oil stocks notched up gains. The Kospi lost 0.1%, weighed down by concerns triggered by the joint drill. Australia’s S&P/ASX 200 slipped 0.4% with telecom and healthcare stocks leading the losers. However, the Shanghai Composite and Shenzhen Composite indexes gained 0.6% and 0.7%, respectively.

Investors switched their attention to the Jackson Hole meet on Tuesday as Asian stocks closed with gains. The Nikkei 225 declined for the fifth consecutive session, losing 0.1% to set its longest streak of losses since April 2016. The Kospi rebounded, gaining 0.4% even as investors ignored concerns surrounding the joint military drill. The S&P/ASX 200 and the Shanghai Composite gained 0.4% and 0.1%, respectively. However, the Shenzhen Composite lost 0.4% to close the day in the red.

Markets across Asia closed mixed despite an overnight rally on U.S. bourses. Meanwhile, the dollar slipped, weighed down by President Trump’s comments. The Nikkei gained 0.3%, snapping its five-day long stretch of losses. The Kospi increased 0.1% while the S&P/ASX 200 lost out on early gains to close the day 0.2% lower. The Shanghai Composite and Shenzhen Composite indexes declined by 0.1% and 0.3%, respectively.

Investors ignored President Trump’s threat of a government shutdown and Asia’s stocks closed with gains on Thursday. The Nikkei 225 lost 0.4% while the Kospi gained 0.4%. Materials and tech stocks helped the S&P/ASX 200 advance 0.2%. The Shanghai Composite and Shenzhen Composite indexes both closed in the red with the former closing 0.5% lower.

Markets across Asia closed in the green on Friday with investors ignoring losses on the U.S. markets caused by domestic political concerns. Investors continued to focus on the outcome of the annual Jackson Hole economic symposium. The Nikkei 225 and the Kospi gained 0.5% and 0.1%, respectively. The S&P/ASX 200 slipped marginally to close the day in the red amidst a spate of earnings reports. The Shanghai Composite and Shenzhen Composite closed in the green with the former closing 1.8% higher.

Bovespa Gains from State Asset Sales Announcements

Latin America stocks endured considerable volatility on Monday even as investors remained focused on the annual Jackson Hole meeting scheduled later in the week. A spike in iron ore prices boosted Vale S.A. (NYSE:VALE) , which in turn lifted Brazil’s Bovespa by 0.3% to its highest level in six months.

Brazil’s stocks continued to notch up gains on Tuesday, rising to their highest level in six months. The Bovespa gained 2.3% to break above the 70,000 level for the first time in more than six years. The day’s gains were a result of the government’s decision to private a key power utility, a development which boosted the demand for government run companies.

The Bovespa increased 0.6% to close at another record level on Wednesday. Brazil’s benchmark was once again lifted by the government decisions to privatize government enterprises. These sales are part of President Michel Temer’s attempts to reduce the role of the state in the economy in an effort to control the budget deficit.

Another round of asset sales announcements from the government led to further gains for Brazil’s stocks on Thursday. The Bovespa gained around 1% to touch yet another new six year high. The index ultimately lost 0.2% on Friday despite the Fed Chair’s decision to refrain from speaking on monetary policy during her Jackson Hole speech. However, stocks in Chile closed at a record level.

Stocks in the News

WPP reported strong results for first-half 2017. Earnings per share (EPS) improved 146.6% year over year to 46.6 pence ($58.67) on the back of revenue growth across all geographic regions and strong performance in all operating segments. WPP has a Zacks Rank #3 (Hold).

Reported revenues for the period increased 13.3% to £7,404 million (down 0.4% to $9.328 billion) year over year, with constant currency growth of 1.9%. For 2017, the advertising giant expects EPS growth to be in the range of 10% to 15% through revenue growth, margin expansion, acquisitions and share buybacks. Growth in net sales margin of 0.3 margin points or more is expected. (Read: Zacks Investment Research

Written By: Zacks Investment Research