Earnings season continued to throw up some surprises, while the big stories of the week related to anti-trust rulings. Commodity markets were lively, with iron ore prices tumbling and oil rising.

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Good Week

 

It was a better week for oil prices, as the International Energy Agency said stocks would fall in the last six months of the year, easing a global glut that has kept a lid on prices. A surprise draw on US stockpiles also boosted crude prices.

Bonds of all kinds are in vogue. The yield on German bunds and UK gilts hit four-week lows, while a report showed junk bond issuance doubled to more than $16bn in April. US municipal bonds attracted rare overseas interest. With negative yields in many bond sectors, investors are going to extreme lengths in the search for yield.

On the macro-economic front, there was some good news for the Eurozone as German GDP beat expectations. Growth topped 0.7% in Q1, up from 0.3% in the last three months of 2015. Malaysia grew at 4.2% year-over-year in the fourth quarter to also beat forecasts.

Things couldn’t get much worse for Mitsubishi, and the news of a $2.2bn investment from Nissan was the relief it needed. Nissan will be the largest shareholder, at 34%. Shares in Mitsubishi jumped 16% on Thursday before retreating a little in the next session. Nissan shares rose 4% on Friday after the deal was confirmed.

In Britain, Tesco chief Dave Lewis secured a £3m bonus after stewarding the UK’s largest retailer back to profit.

Monsanto shares rose on Friday after reports German group Bayer is exploring a $40bn bid for the US firm.

Bad Week

 

It was not a good week for Hong Kong’s CK Hutchison, after the European competition commissioner, Margrethe Vestager, blocked its £10.5bn acquisition of O2, which it had hoped to merge with Three, its own UK-based mobile business.

Office Depot and Staples were also on the wrong side of anti-trust regulators, as the firms abandoned their $6.3bn merger after a US judge backed the Federal Trade Commission’s request to halt the deal. Shares in the pair slumped on the news.

There was more bad news for Gap, which was downgraded to junk status by Fitch after a poor run of results. Sharp posted a big loss just two months after it agreed to be bought by Taiwan’s Foxconn.

Department stores are having a rough time of it. Macy’s stock plunged 15% at one stage as it reported its fifth straight quarterly decline in sales. Nordstrom followed suit, with shares falling as much as 17% after it cut its sales outlook and full-year profit.

Carmakers are still not out of the woods. VW’s market share declined, while exploding airbags forced Honda into a net loss of $859m in the first quarter.

British bookmaker William Hill posted soggy results after a poor run of results, including losing more than £2 million on Leicester City’s remarkable Premier League win. Disney missed earnings per shares estimates for the first time in five years despite stellar returns from its film division led by Star Wars.

Brazil’s woes continued. As senators voted to impeach president Dilma Rousseff, state controlled oil company Petrobas posted its third straight quarterly loss. The real climbed. Hungary posted a surprise fall in GDP growth.

Iron ore’s slump continued as futures contracts on China’s Dalian Commodity Exchange fell again, taking their year-to-date decline to 25%.

Mining sector trouble was also evident in South Africa, where production of major commodities fell sharply in March. Output of gold fell 18%, while production of platinum group metals was down almost 24%. Coal and iron ore output were also down sharply.