By IFCMarkets
US stocks end little changed
US stocks closed marginally lower on Monday paring earlier gains spurred by boost in market sentiment from advancing oil and jump in homebuilder confidence. The dollar weakened with investors looking ahead to Federal Reserve’s policy meeting of September 20-21.
The live dollar index data show the ICE US Dollar Index, a measure of the dollar’s value against a basket of six major currencies, edged down 0.2% to 95.828. The Dow Jones industrial average closed 0.02% lower at 18120.17 led by Merck and Intel shares. TheS&P 500 slipped 0.04 points to 2139.12 with telecom and health-care stocks weighing on the index. Utilities and financials led gainers with home-builder stocks posting the biggest gains after the National Association of Home Builders’ index jumped six points to 65 in September, its highest reading in a decade. The Nasdaq composite fell 0.2% to 5235.03. Market participants will focus today on Federal Reserve’s two-day policy meeting where the central bank is mostly expected to keep rates unchanged: fed fund futures market participants are pricing a 12% probability of a September rate increase, according to CME Group’s FedWatch tool. Today at 14:30 CET August Housing Starts and Building Permits will be released, the outlook is negative.
Commodity shares lead European stocks higher
European stocks rose on Monday following the lead of commodity shares lifted by lowered expectations of a Federal Reserve rate hike at September policy meeting. The euro and Pound gained against the dollar.
The Stoxx Europe 600 closed 1% higher. Glencore jumped 6.2% as Credit Suisse raised its rating on the miner to outperform from neutral. Shares of oil companies rose on expectations of an output freeze agreement at oil producer informal talks in Algeria next week: France’s Total rallied 2.7%, Royal Dutch Shell rose 1.8%. Germany’s DAX 30 gained 1% settling at 10373.87, France’s CAC 40 jumped 1.4% and UK FTSE 100 ended 1.5% higher. No important data are expected today in euro-zone.
Asian stocks are falling
Asian stocks are falling today as investors have adopted a cautious stance ahead of central bank meetings. Chinese stocks are retreating in thin trading with a rise in property shares failing to offset declines in other sectors. Property stocks rose after official data showed the average new home price in 70 major Chinese cities climbed 9.2% from a year earlier in August, up from 7.9% in July. The Shanghai Composite Index is down 0.1% and Hong Kong’s Hang Seng index is 0.17% lower. Australia’s All Ordinaries Index gained 0.07% lifted by Australia’s central bank report it would keep interest rates on hold possibly until next year to support growth. Nikkei ended 0.2% lower today at 16492.15 with yen continuing strengthening against the dollar. Investors are uncertain what policy changes will announce Bank of Japan at the close of its two-day meeting on September 21. There were reports the central bank considered cutting its interest rate on excess reserves further into negative territory and reducing purchases of long term bonds to steepen the yield curve.
Oil prices are retreating
Oil futures prices are falling today after Venezuela’s Oil Minister Eulogio Del Pino said global oil supply of 94 million barrels per day needs to fall by about a tenth to match global consumption. Survey by S&P Global Platts estimates US crude stocks increased by 2.8 million barrels last week due to lower refining activities. November Brent crude rose 0.4% to $45.95 a barrel on London’s ICE Futures exchange on Monday. Oil prices got a lift from Venezuelan President Nicolás Maduro’s announcement at the end of a summit of the Non-Aligned Movement on Sunday members of Organization of the Petroleum Exporting Countries and non-cartel members are nearing a deal on production.
Market Analysis provided by IFCMarkets
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