US broad market edges up as energy stocks follow oil higher - 11.5.2017

Nasdaq hits a fresh record

US stocks closed marginally higher on Wednesday led by energy shares as oil advanced. The dollar inched higher as Treasury yields edged higher: 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, closed up 0.1% at 99.627. The S&P 500 added less than 0.1% settling at 2399.63 with eight out of 11 sectors ending higher, led by the energy sector up 1.1%. The Dow Jones industrial average fell 0.2% to 20943.11 weighed by Walt Disney and Boeing shares, down 2.15% and 1.25% respectively. Nasdaq index posted its fifth consecutive gain rising 0.1% to a record high 6129.14.

Markets weren’t impacted much by President Donald Trump’s abrupt firing of FBI Director James Comey. Boston Fed President Eric Rosengren, a nonvoting member of the Fed, said the central bank should raise interest rates three more times this year and gradually reduce the $4.5 trillion balance sheet after the next rate increase. A day ago he commented the Fed should begin reducing the balance sheet “relatively soon”. Economic data were positive on Wednesday: import prices rose 0.5% in April, while export prices were up 0.2%. Both were higher than expected. And the US recorded an April budget surplus of $182 billion. Today at 14:30 CET initial jobless claims and unemployment claims will be released, as well as April Producer Price Index will be published, the outlook is positive for dollar.

European stocks rise on positive earnings reports

European stocks advanced on Wednesday with investor confidence further buoyed by solid earnings updates after market-friendly victory of Emmanuel Macron in the French presidential election on Sunday. Both the euro and British Pound slipped against the dollar. The Stoxx Europe 600 added 0.2% to Tuesday’s 0.5%, up 9.7% year to date. Germany’s DAX 30 rose 0.1% to 12757.46. France’s CAC 40 gained less than 0.1% and UK’s FTSE 100 index rose 0.6% settling at 7385.24.

Positive earnings reports provided additional support for market sentiment as more than 71% of European firms having beaten earnings expectations with the European earnings season more than halfway through. And bank stocks are among the strongest performers so far. In economic news, the 2% rise in French industrial production was bigger than expected, lifted by 2.5% jump in manufacturing production. Today at 10:30 CET March Trade Balance, Manufacturing and Industrial Production, Construction Output will be published in UK, the outlook is negative for Pound. At 13:00 CET Bank of England interest rate decision will be published in UK. No change in policy is expected. And at 14:00 CET April GDP will be released, the outlook is negative for Pound.

Asian stocks extend gains

Asian stock indices are up today led by energy and materials stocks as oil price continues rising. Nikkei ended 0.4% higher at 19975.00 despite a yen pullback against the dollar. Chinese stocks are up after reports country’s stock regulator’s crackdown in the shadow-banking sector is targeted at nonstandard assets and doesn’t include bonds, relieving liquidity concerns. Shanghai Composite Index is 0.3% higher and Hong Kong’s Hang Seng Index is up 0.5%. Australia’s All Ordinaries Index is 0.02% higher as the Australian dollar extends gains against the greenback.

NIKKEI

Oil prices rebound on US inventory draw

Oil futures prices are rising after US government data revealed the biggest weekly decline in domestic crude supplies so far this year. On Wednesday the Energy Information Administration reported that US crude supplies fell 5.2 million barrels last week, as imports dropped sharply while inventories of refined products also fell. However US crude oil output continued rising, up 21 thousand barrels to 9.314 million barrels per day. Oil prices were supported also by news Saudi Aramco will reduce oil supplies to Asian customers by about 7 million barrels in June as domestic consumption grew. July Brent crude rose 3.1% to $50.22 a barrel on Wednesday on London’s ICE Futures exchange.