By IFCMarkets
Dow slips while US broad market edges higher
US stock indices closed marginally higher on Monday in light trading as investors refrained from making big bets ahead of Federal Reserve policy meeting this week. The dollar strengthened with markets pricing in high likelihood of March rate hike: 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, inched 0.1% higher to 101.406. The Dow Jones average slipped 0.1% to 20881.48, led by Intel and Merck shares. S&P 500 ended 0.1% higher at 2373.47 with consumer discretionary and materials stocks closing higher and the consumer staples and health care sectors finishing in the red. The Nasdaq composite index closed 0.2% higher at 5875.78.
Treasury yields rose on Monday as markets deem a rate hike at conclusion of Federal Reserve’s two day policy meeting on Wednesday as virtual certainty. Healthcare stocks declined the most as investors are uncertain what will be the fate of the proposed health care laws with President Donald Trump meeting leaders of the Republican Party seeking their support for the proposed law. Shares of Intel fell 2.1% on news the chip maker plans to buy Mobileye NV, a driverless technology maker for $15.3 billion. Shares of Mobileye rallied 28%. Today at 14:30 CET February Producer Price Index will be released in US. The tentative outlook is negative for the dollar.
European stocks advance despite heightened political uncertainty
European stocks advanced on Monday in choppy trade amid increased political uncertainty ahead of Dutch election on Wednesday and important monetary policy meetings of Federal Reserve and Bank of England. The euro fell against the dollar but the British Pound gained against the greenback after report UK Prime Minister Theresa May will not start the formal process to begin the country’s exit out of the European Union this week. The Stoxx Europe 600 index rose 0.4%. The DAX 30 gained 0.2% to close at 11990.03. France’s CAC 40 ended 0.1% higher and UK’s FTSE 100 rose 0.3% settling at 7367.08.
Dutch elections this Wednesday are seen as a test of populist sentiment ahead of France’s election in April where National Front leader Marine Le Pen has vowed to take the country out of the European Union. The anti-EU far right Party for Freedom (PVV), led by Geert Wilders, aims to take the most seats in the Netherlands on Wednesday amid concerns a diplomatic standoff between Turkey and the Netherlands over the weekend could result in more votes for the far right candidate. And in Scotland First Minister Nicola Sturgeon on Monday called for a second referendum on whether the country should split from the UK. Today at 12:00 CET March ZEW survey results for Germany and euro-zone will come out. The tentative outlook is positive for euro. The final reading of February inflation in Germany came in unchanged at 2.2%.
Asian markets down
Asian stocks are mostly down as investors await the Federal Reserve interest rate decision on Wednesday. Nikkei ended 0.1% lower at 19609.50 despite a weaker yen against the dollar. Toshiba stocks ended 0.5% higher after dropping more than 8%. The company announced it would “aggressively consider” a sale of most of Westinghouse nuclear power business. Chinese stocks pared earlier gains after data showed retail sales in February grew less than expected: the Shanghai Composite Index is 0.1% lower while Hong Kong’s Hang Seng Index is up 0.3%. Australia’s All Ordinaries Index ended little changed closing 0.02% lower with the Australian dollar falling against the dollar.
Oil prices retreat
Oil futures prices are falling today after focus shifted back again on global oversupply. Prices fell on Monday after the Energy Information Administration said it expects an increase in domestic shale oil output to nearly 5 million barrels a day in April, the highest monthly level in roughly a year. Later today the American Petroleum Institute industry group will report its estimate of the US crude stockpile for the last week. May Brent crude lost 0.03% to $51.29 a barrel on London’s ICE Futures exchange on Monday.
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