Daily Global Market Update 11 February, 2015 Investor optimism for a potential Greek debt deal buoyed European markets Stocks were mixed Tuesday as investors monitored the latest news from Greece. United States US stocks rallied Tuesday buoyed by hopes for a deal between Greece and its international creditors. The Dow Jones industrials were up 0.8%, the S&P added 1.1% and the Nasdaq was 1.3% higher. Tuesday’s stock market moves reversed Monday’s losses when stocks fell amid worries about the standoff between Greece and its creditors. Coca-Cola gained after its fourth quarter profit beat analysts’ expectations. The company which derives most of its profit overseas said 2015 would be a “transition year” as it deals with cost cutting plans and currency impacts. Energy stocks declined thanks to falling crude oil prices. Qualcomm advanced after it said it reached a settlement with the Chinese government in its investigation into whether the US chip maker violated the country’s antimonopoly law. Starwood Hotels & Resorts Worldwide plans to spin off its vacation ownership business into a separate company. It said the move would take advantage of the increasing growth opportunities in the timeshare industry. Pfizer was up after saying it would buy back US$5 billion of its stock. Gold at the afternoon London fixing was down US$4.00 to US$1,234.50. Copper futures were down 1.1% to US$2.55. WTI spot crude was down US$2.39 to US$50.47. Dated Brent spot crude was down US$1.44 to US$56.90. The US dollar was up against the yen, Swiss franc and the Canadian and Australian dollars. It was virtually unchanged against the euro. However, it declined against the pound. The Dollar Index was up 0.2%. The yields on both the US Treasury 30 year bond and the 10 year note were up 4 basis points to 2.57% while the yield on the 10 year note slipped 4 basis points to 1.99%. Europe Stocks were mostly higher Tuesday. Investor optimism for a potential Greek debt deal was the driving force behind the gains. Energy and mining stocks were among the weakest performing stocks due to declines in the price of oil and in the price of precious metals. The CAC and DAX advanced 1.0% and 0.8% respectively. However, both the SMI and FTSE retreated 0.1%. Eurozone officials are reportedly considering extending Greece's bailout program by up to six months. The European Commission will reportedly offer the proposal amid indications that the new Greek government is softening its rhetoric behind the scenes. The reports eased concerns about the Greek debt negotiations after a defiant speech by new Greek Prime Minister Alexis Tsipras weighed on the markets on Monday. HeidelbergCement, which reported fourth-quarter results, gained. BMW finished higher after the firm reported a 7% growth in January sales. Daimler and Volkswagen also gained. Michelin dropped after reporting full year figures. Both Total and Technip were down. Royal Mail dropped on a broker downgrade. Mondi climbed after the company confirmed that underlying operating profit for the year ended December 31, 2014 is expected to be above the €699 million achieved in 2013. Mining stocks were weak thanks to a decline in gold prices. Fresnillo, Randgold Resources, Rio Tinto, Antofagasta, BHP Billiton and Anglo American all declined on the day. UBS was down after the lender reported fourth quarter results. French industrial output was up a surprising 1.5% in December after declining 0.2% in November. UK industrial production declined a more than expected 0.2% in December as maintenance work in the North Sea fields dragged oil output lower. However, the manufacturing sector edged up 0.1%. Italian industrial production was up for a second straight month in December, defying expectations for stagnation. Industrial production grew a seasonally adjusted 0.4% monthly after a 0.3% gain in November. Asia Pacific Stocks were mixed a day after Greek Prime Minister Alexis Tsipras rejected an extension of the international bailout and vowed to reverse the austerity imposed by the previous government, fanning fresh fears of a possible Greek exit from the Eurozone. While escalating violence in eastern Ukraine added to the downbeat sentiment, Chinese shares gained for a second day on stimulus hopes. The Shanghai Composite was up 1.5%. Weak inflation data fanned expectations that the People’s Bank of China would adjust its monetary policy to support weakening economic growth. The Hang Seng however was virtually unchanged (up 7.10 points). The January consumer price index was up just 0.8% on the year after increasing 1.5% in December. Expectations were for an increase of 1.0%. The producer price index also missed forecasts, dropping 4.3% on the year, marking its 35th consecutive monthly decline. The Nikkei retreated 0.3% thanks to a stronger yen. The currency edged up slightly against the US dollar after European Commission President Jean-Claude Juncker warned Greeks not to expect the Eurozone to accept the latest terms proposed by Greece's new government. Fast Retailing and SoftBank were lower while Fanuc rallied. Exporter shares closed mostly higher with Canon, Sharp and Nikon advancing. Nissan Motor gained after the automaker raised its full year profit forecast after reporting a 24% increase in net income for the nine months ended December. Honda Motor, Suzuki Motor and Toyota Motor were up while Mazda Motor declined. Australian shares fell for a second consecutive session as renewed worries about Greek debt negotiations gave investors a reason to book some profits after recent sharp gains. Both the S&P/ASX and All Ordinaries were down 0.2%. The Kospi declined 0.6% while the Sensex added 0.5%. Global Stock Market Recap End 2014 Feb 9 Dow NASDAQ S&P 500 S&P/TSX Comp** 16576.7 17729.2 17868.8 139.5 0.8 0.3 11.7 4176.6 4726.0 4787.6 61.6 1.3 1.1 14.2 1848.4 2046.7 2068.6 21.9 1.1 0.5 13.7 13621.6 15100.7 15112.5 11.8 0.1 3.3 8.9 FTSE 100 CAC XETRA DAX MIB Ibex 35 OMX Stockholm 30 SMI 6749.1 6837.2 6829.1 -8.0 -0.1 4.0 2.3 4296.0 4651.1 4695.7 44.6 1.0 9.9 9.6 9552.2 10663.5 10753.8 90.3 0.8 9.7 13.5 18967.7 20366.6 20725.6 359.0 1.8 9.0 4.2 9916.7 10364.9 10500.1 135.2 1.3 2.1 4.1 1333.0 1591.4 1602.7 11.3 0.7 9.4 20.0 8203.0 8632.1 8620.4 -11.7 -0.1 -4.0 3.1 Index North America United States Canada Europe UK France Germany Italy Spain Sweden Switzerland Asia/Pacific Australia All Ordinaries Japan Nikkei 225 Hong Kong Hang Seng S. Korea Kospi Singapore STI China Shanghai Comp India Sensex 30 Data Source — Haver Analytics 2015 Feb 10 Daily Change Percent Change Daily 2015 Yr/Yr 5353.1 5770.2 5757.4 -12.7 -0.2 6.8 9.3 16291.3 17711.9 17652.7 -59.3 -0.3 1.2 n.a. 23306.4 24521.0 24528.1 7.1 0.0 3.9 11.7 2011.3 1947.0 1935.9 -11.1 -0.6 1.1 0.2 3167.4 3418.0 3434.2 16.2 0.5 2.1 13.4 2116.0 3095.1 3141.6 46.5 1.5 -2.9 49.3 21170.7 28227.4 28355.6 128.2 0.5 3.1 39.2 Looking forward* Australia releases December home loan data. The US Treasury budget for January will be published. *Note — all releases are listed in local time. The Longer-Term Perspective The table below demonstrates that while we may experience some short-term weakness in markets, the longer-term performance remains encouraging. Equity markets as at 10/02/2015 Market % change 12 mths to 10/02/2015 Source: Datastream, Price Index Returns in local currency % change 12 mths to 10/02/2014 % change 12 mths to 10/02/2013 % change 12 mths to 10/02/2012 % change 12 mths to 10/02/2011 US: Dow Jones 13.08 12.93 9.31 4.68 21.83 US: S&P 500 14.93 18.57 13.06 1.57 23.75 US: NASDAQ 15.42 29.88 9.99 4.06 29.92 MSCI Europe 8.47 12.07 9.57 -10.25 14.86 UK: FTSE All Share 3.64 7.48 8.92 -3.13 18.78 UK: FTSE 100 3.60 5.23 7.03 -2.78 17.30 Germany: DAX 15.76 21.40 14.33 -8.82 32.58 France: CAC 40 10.82 16.10 8.19 -17.63 12.64 Netherlands: All Share 16.67 11.59 5.31 -12.99 17.99 Italy: S&P MIB 5.30 18.35 1.65 -27.60 6.38 Switzerland: SMI 3.55 12.56 20.64 -7.28 4.39 Spain: IBEX 35 5.18 22.11 -7.07 -18.48 3.22 Sweden: OMX 21.54 12.22 10.30 -5.47 20.27 Japan: Nikkei 19.94 31.97 24.66 -15.64 6.44 MSCI Asia Pacific ex Japan 12.42 -1.03 9.40 -6.36 13.90 Hong Kong: Hang Seng 13.67 -7.05 11.70 -8.48 13.99 Australia: S&P/ASX 200 11.08 5.04 17.10 -13.62 8.88 China: Shanghai Shenzhen 300 50.25 -18.19 9.40 -18.38 -3.42 Anne D Picker Chief Economist Econoday Important Information Econoday Inc. is a US company that provides financial commentary and indicators to industry professionals. All information provided and views expressed are those of Econoday. Reference in this document to specific securities should not be construed as a recommendation to buy or sell these securities, but is included for the purposes of illustration only. Past performance is not a reliable indicator of future results. The value of investments can go down as well as up and investors may not get back the amount invested.