Foreign markets grappled with political events in the U.S. and tensions related to North Korea over last week. Europe’s stocks were also weighed down by the shocking terror attack in Barcelona. Earnings numbers, particularly from Australia, continued to have a significant impact on market direction. Meanwhile, stocks in Argentina and Brazil were largely guided by policy-related developments.

Trump’s Actions, Spain Terror Strike End STOXX’s Winning Run

Stocks across Europe closed in the green on Monday after prominent U.S. officials downplayed the chances of a conflict with North Korea. The STOXX 600 added 1.1% with nearly all sectors closing with gains. Banking stocks were among the leading performers, closing the day more than 1.4% higher.

The STOXX 600 increased 0.1% on Tuesday with nearly all its sectors ending the day with gains. The de-escalation of tensions between the U.S. and North Korea prompted investors to turn toward relatively riskier investments. Shares of oil and gas companies fell following concerns over weak demand in China even as strong OPEC production dampened investor sentiment.

Easing of tensions between the U.S. and North Korea once again contributed to gains on Wednesday. The STOXX 600 gained 0.7% even as investors eagerly awaited the release of the minutes of the Fed’s July meeting. Energy and basic resources stocks were the leading gainers of the day following an increase in prices of oil and metals.

The STOXX 600 closed in the red on Thursday, losing 0.6%, following concerns over domestic political events in the U.S. President Trump’s decision to dissolve two business advisory councils weighed on investor sentiment. Banking stocks lost in excess of 1.5% after minutes released by the ECB reflected concerns over a likely surge in the Euro.

Stocks across Europe closed in the red on Friday in the aftermath of the most devastating terror attack experienced by Spain in 13 years. The STOXX 600 closed the day 0.7% lower but managed to secure a weekly gain of 0.6%. The FTSE 100, CAC 40, DAX and Spain’s IBEX 35 declined 0.9%, 0.6%, 0.3% and 0.6%, respectively.

U.S. Political Events, North Korea Tensions Weigh on Asia’s Stocks

A strong second-quarter GDP reading from Japan failed to arrest the Nikkei 225’s slide on Monday with the index slipping 1%. The 4% pace of expansion easily exceeded most forecasts. Geopolitical concerns led to South Korea’s Kospi losing 0.6%. Meanwhile, the S&P/ASX 200 gained 0.7%. The Shanghai Composite and the Shenzhen Composite gained 0.9% and 2%, respectively, with the Hang Seng also closing in the green. 

Stocks across Asia ended with gains on Tuesday following strong gains on Wall Street and a change in investors’ risk appetite. The Nikkei 225 gained 1.1% even as the dollar gained versus the yen. The S&P/ASX 200 gained 0.5%. While the Hang Seng ended in the green, the Shanghai Composite and the Shenzhen Composite each gained 0.4%. India and South Korea’s bourses were closed for public holidays.

The majority of markets across Asia closed higher on Wednesday even as several companies from the region released earnings and the dollar moved higher. However, the Nikkei 225 lost 0.1%. The Kospi gained 0.6% while the S&P/ASX 200 recovered from early losses to end the day 0.5% higher. Even though the Hang Seng closed the day with gains and the Shenzhen Composite moved 0.6% higher, the benchmark Shanghai Composite ended the day 0.1% lower.

Stocks across Asia ended mixed on Thursday after the dollar’ surge was curbed by political events in the U.S. The Nikkei 225 lost 0.1% with auto and financials closing the day in the red. The Kospi gained 0.6% while the S&P/ASX 200 lost 0.1% and the Hang Seng closed the day in the red. However, the Shanghai Composite and the Shenzhen Composite increased 0.7% and 0.6%, respectively.

A selloff on Wall Street, triggered by rising apprehensions about the Trump administration’s likelihood of implementing its policy agenda, led to losses for Asia’s stocks on Friday. The Nikkei 225 lost 1.2%, falling to its lowest level in three months. The Kospi and the S&P/ASX 200 lost 0.1% and 0.6%, respectively. The Hang Seng ended the day in the red while the Shenzhen Composite declined 0.4%. Only the Shanghai Composite closed the day in the green, garnering slim gains.

Bovespa Gains from Policy Actions, Macri’s Fortunes Guide Argentina’s Stocks

Latin America stocks recovered from the previous week’s selloff on Monday. A climb-down in tensions between the U.S. and North Korea was primarily responsible for the day’s gains. Mexico’s benchmark S&P/BMV IPC index increased 1.1%, rebounding from its worst weekly losses in eight months. Brazil’s Bovespa gained 1.6%, rising to the highest point witnessed since May.

On Tuesday, markets across Latin America closed mixed. The Bovespa gained 0.5%, powered by a bunch of bullish corporate developments. Argentina’s benchmark index the Merval lost 1.1% following a bout of profit taking following strong gains on Monday. Expectations that President Mauricio Macri, a candidate favorably disposed to industry, would gain from mid-term legislative elections lifted Argentina’s stocks.

Stocks in Brazil swung between gains and losses on Wednesday after credit agency Standard & Poor’s refrained from downgrading the country. The decision came after the country extended budget deficit targets to 2020 after legislators declined to increase taxes, a move required to raise revenues impacted by the recession. The Bovespa closed the day flat. Meanwhile, the S&P/BMV IPC index lost 0.6%.

The Bovespa lost 0.2% on Thursday, snapping a four-session long stretch of gains. Stocks in Brazil were weighed down by concerns that the government would fail to push through social security reforms, which would impair the country’s efforts to reduce surging public debt.

Brazil’s stocks were near their highest level in six months on Friday. The government’s decision to extend tax incentives for the oil industry lifted shares of oil major Petrobras (PBR Quick QuotePBR - Free Report) . Shares of the state-owned company gained 3.6%, marking the largest increase in a month. Vale SA (VALE Quick QuoteVALE - Free Report) contributed most of the Bovespa’s gains for the day, following a rise in iron futures listed in China. Brazil’s benchmark index closed the day 1.2% higher.

Stocks in the News

Alibaba Group Holding Limited (BABA Quick QuoteBABA - Free Report) reported first-quarter fiscal 2018 (ended Jun 30, 2017) earnings of 94 cents per share, surpassing the Zacks Consensus Estimate by 21 cents. Alibaba reported revenues of RMB50.18 billion (US$7.40 billion), up 30.1% sequentially and 56.1% year over year. Also, revenues were above the Zacks Consensus Estimate of US$7.02 billion.

Mobile MAUs were 529 million, improving 24% year over year and 4% sequentially. This was because the adoption of mobile devices by consumers increased as the primary method of accessing Alibaba’s platforms. 

China retail marketplaces had 466 million annual active buyers in the 12-month period ended Jun 30, 2017, representing 7% year-over-year growth. The number of paying customers of the cloud-computing business was 1,011,000, increasing 75% year over year and 16% sequentially. The stock has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Petrobras announced second-quarter earnings per ADR of 8 cents, lagging the Zacks Consensus Estimate of 15 cents. A significantly larger tax outgo on account of an adjustment program and lower oil sales volume in Brazil were primarily responsible for the underperformance, partly offset by higher crude price and cost cuts.

Importantly, Zacks Rank #3 (Hold) Petrobras generated free cash flows of $2,907 million for the quarter ended Jun 30 -- positive for the ninth quarter in a row -- reflecting operational improvement and lower investments. Moreover, adjusted EBITDA edged up 2% year over year to $5,934 million.

The troubled national oil company’s net operating revenues of $20,823 million were ahead of the year-earlier revenues of $20,320 million but were shy of the Zacks Consensus Estimate of $23,781 million. (Read: Petrobras Q2 Earnings Miss but Manages to Cut Debt)

BP plc’s (BP Quick QuoteBP - Free Report) unit, BP Trinidad and Tobago (“BPTT”), announced the commissioning of the Juniper development which yielded its first oil. Juniper started production on schedule and under budget.

Juniper development represents the fifth of BP’s seven upstream major project start-ups and second in Trinidad planned for 2017. The project is anticipated to enhance BPTT’s gas production capacity by an estimated 590 million standard cubic feet a day (mmscfd). Juniper also signifies Zacks Rank #3 BP’s first subsea field development in Trinidad, which involves an investment of about $2 billion. (Read: BP's Unit Brings Juniper Online on Schedule and Under Budget)

JD.com’s (JD Quick QuoteJD - Free Report) shares slid more than 2.2% in pre-market trading on Aug 14 after the company reported its second-quarter earnings results. Despite impressive revenue growth, JD looks to be getting punished for increased spending and a wider net loss.

In the second quarter, China’s second-largest e-commerce firm reported revenues of 93.2 billion yuan ($13.98 billion), which marked growth of nearly 44% year over year and cruised past our consensus estimate of $13.14 billion.

However, Zacks Rank #3 JD.com reported net loss attributable to shareholders of 496.4 million yuan ($74.43 million), up significantly from 252.3 million yuan in the prior-year period. JD’s loss widened on the back of higher marketing expenses, which climbed 63% to 4.1 billion yuan -- primarily due to sales events in the month of June. (Read: JD.com Stock Slides Despite Massive Quarterly Revenue Growth)

Fujifilm Holdings Corporation (FUJIY Quick QuoteFUJIY - Free Report) reported solid earnings for first-quarter fiscal 2018 (ended Jun 30, 2017). Quarterly earnings per American Depositary Receipt (ADR) came in at 90 cents, surging 291.3% year over year. The bottom line also comfortably beat the Zacks Consensus Estimate of 21 cents per ADR. Fujifilm has a Zacks Rank #4 (Sell).

In the reported quarter, revenues improved 4.7% year over year to ¥571.5 billion ($5,143.9 million). In addition, the top line handily surpassed the Zacks Consensus Estimate of $5,118 million. (Read: Fujifilm Q1 Earnings & Revenues Beat, Shares Up)

Infosys Limited’s (INFY Quick QuoteINFY - Free Report) chief executive officer and managing director Vishal Sikka stepped down on Aug 18, citing conflicts that deteriorated into mudslinging under an anonymous name. The move led to deep unrest among investors, causing shares to plunge 10.8% at one point in pre-market trading. Infosys has a Zacks Rank #3.

The surprise move came amid intensifying animosity between the board and the co-founders, led by NR Narayana Murthy. It seems that a seven-month-long confrontation between the company’s founders on one hand, and Sikka and the board on the other, culminated into this drastic move. This is the second time that Infosys has plunged into a leadership crisis, after the founding members retired from the top management. (Read: Infosys MD & CEO Vishal Sikka Steps Down, Shares Tumble)

Performance of Leading Foreign Stocks

The table given below shows the price movements of 10 of the largest stocks listed on indexes worldwide, over the last five days and during the last six months.

Next Week’s Outlook

With the possible exception of the Barcelona terror attack, events in the U.S. have largely guided foreign stocks this week. Growing concerns about Trump’s ability to execute his reforms agenda have weighed down stocks across the world’s bourses.

This is a trend that is likely to continue going forward. It remains to be seen if such events continue to have a significant impact on markets. Indeed, investors would need a bullish batch of earnings and economic news to ignore developments related to the Trump administration.

More Stock News: This Is Bigger than the iPhone!                  

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.

Click here for the 6 trades >>