All three US indexes close at new highs - 5.11.2019

Dollar weakening slows

US stocks rally continued on Monday as China deal optimism and positive earnings reports supported risk appetite. The S&P 500 finished 0.4% higher at new record high 3078.27. Dow Jones industrial added 0.4% to 27462.11. The Nasdaq composite rose 0.6% to 8432.20. The dollar weakening halted as Federal Reserve Minneapolis Fed President Neel Kashkari said the central bank may not cut rates further as long as US economy growth remained robust: the live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, rose 0.4% to 97.56 but is lower currently. Futures on US stock indices point to higher openings.

Better than expected quarterly reports underpin investment sentiment. Of the 356 companies in the S&P 500 that have reported third quarter earnings so far, 75.8% have reported earnings per share that exceeded forecasts, according to data from Refinitiv. This share of companies with results beating forecasts exceeded the above-average 65% beat rate since 1994. The results so far, if projected on remaining companies, point to the pace for an overall decline in SP500 earnings of 0.8%, up from a predicted 2.2% contraction on October 1.

DAX posts biggest gain among European indexes

European stock market notched back to back gains on Monday with global growth slowing concerns receding. Both EUR/USD and GBP/USD turned lower yesterday with euro higher against the dollar while Pound retreating currently. The Stoxx Europe 600 index ended 1.0% higher Monday as manufacturing data out of Spain, Italy, France, Germany came marginally better than expected. The DAX 30 rallied 1.4% to 13136.28. France’s CAC 40 rose 1.1% and UK’s FTSE 100 gained 0.9% to 7369.69.

Nikkei rally leads Asian indexes gains

Asian stock indices are extending gains today after Monday reports the US was considering rolling back tariffs on $112 billion in Chinese goods as a concession to reach a phase one deal. Nikkei rallied 1.8% to 23251.99 with yen slide against the dollar intact as the Bank of Japan reduced its purchase of bonds with 10 to 25 years to maturity to 100 billion yen ($920 million), from 120 billion yen previously. Markets in China are rising despite report China’s Caixin services PMI slowed to 8-month low. The Shanghai Composite Index is up 0.5% and Hong Kong’s Hang Seng Index is 0.4% higher. Australia’s All Ordinaries Index extended gains 0.2% despite Australian dollar’s resumed climb against the greenback following Australia's central bank decision to leave interest rates unchanged.

AU200 testing support 11/5/2019 Market Overview IFC Markets chart

Brent down

Brent futures prices are marginally lower today. Prices rose yesterday as Saudi Arabia formally began an initial public offering on Sunday of a portion of Saudi Aramco: January Brent crude closed 0.7% higher at $62.13 a barrel on Monday.