By IFCMarkets
US stocks ended slightly lower on Wednesday after the release of moderately positive Beige Book report by Federal Reserve provided some support for a rate hike likelihood soon.
The dollar edged higher against major currencies. 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 0.1% to 94. 941. The Dow Jones industrial average fell 0.1% to 18526.00, with shares of Wal-Mart and Home Depot, down 1.3% and 1% respectively, pulling the blue chip index into negative territory despite a 2% gain in Caterpillar. The S&P 500 slipped less than a point to 2186.15, led by 0.9% loss in consumer staples stocks. The broad market index has now ended 50 consecutive sessions without a daily drop of more than 1%. The Nasdaq composite index rose 0.2% to a record close of 5283.93 helped by Apple’s event. Federal Reserve’s Beige Book based on anecdotal information from various districts indicated that the US economy expanded at a modest pace in July and August. And while the report showed there was little sign that wage pressures are being felt beyond highly skilled jobs, the positive Labor Department report on Wednesday said job openings soared to an all-time high of 5.9 million in July. With healthy demand for labor pointing to continued strength in labor market the moderately positive Beige Book report was seen as rather supportive for the case of a rate hike soon. Today at 13:30 CET Initial Jobless Claims and Continuing Claims will be released in US. At 16:30 CET Natural Gas Storage Change will be released by the Energy Information Administration.
European stocks advanced on Wednesday in a choppy session as investors anticipated European Central Bank will continue its asset purchases program to stimulate the economy.
The euro and Pound edged lower against the dollar. The Stoxx Europe 600 rose 0.29% to near 8 month high. Germany’s DAX 30index closed 0.6% higher at 10752.98 despite unexpected 1.5% fall in July industrial production when a growth of 0.1% was forecast. France’s CAC 40 gained 0.6% while UK’s FTSE 100 added 0.3% despite a bigger than expected 0.9% decline in manufacturing in July as industrial production grew at previous month’s rate of 0.1%. Today at 13:45 CET European Central Bank Interest Rate Decision will be released. No change in interest rate is expected. And at 14:30 CET the ECB press conference will start. Investors don’t expect additional stimulus measures after this meeting, though some anticipate a change in rules for the bank to be able to continue to purchase assets beyond the central bank’s self-imposed limit.
Asian stocks are mixed today with Chinese stocks advancing after unexpected trade data.
Chinese imports rose 1.5% in August from a year ago instead of expected 5.7% drop, while exports fell 2.8%, less than the expected 4%. Hong Kong’s Hang Seng Index is up 0.6% with Shanghai Composite Index 0.1% higher. Australia’s S&P ASX 200 closed 0.66% lower as Australian dollar strengthened. Nikkei fell 0.3% today as yen edged higher against the dollar and Bank of Japan Deputy Governor Hiroshi Nakaso said the central bank will not rule out deepening negative interest rates.
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