By IFCMarkets
US stocks ended lower on Thursday in thin trading with investors refraining from big bets as they awaited the start of the central bankers’ symposium at Jackson Hole, Wyoming. The dollar inched 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, rose 0.1% to 93.276. Dow Jones industrial average slipped 0.1% closing at 21783.40 with shares of Wall Mart leading the decliners and Cisco shares the largest gainer. The S&P 500 fell 0.2% settling at 2438.97 led by consumer staples stocks, down 1.3%. The Nasdaq index ended off 0.1% at 6271.33.
Stocks were supported by comments of House Speaker Paul Ryan expressing confidence in passing a tax-overhaul law this year and raising the debt ceiling. Trading volume was the lightest year to date, with about 5 billion shares traded, well below the year-to-date average of 6.54 billion. Seasonally low trading volume was also negatively affected by cautious mood as many investors stayed on side lines waiting for more details about expected reduction of Fed’s $4.5 trillion balance sheet and rate hike this year from Fed chair Janet Yellen’s speech today. In an interview about the uncertain impact of shrinking of Fed’s balance sheet Dallas Fed president Kaplan signaled that another rate hike at the end of the year was not a given since the central bank could afford to be “patient” and see if inflation pressures pick up. Kaplan is a voting member of the Fed policy committee this year. Economic data were mixed: the 2000 rise in jobless claims last week was smaller than expected. new home sales for July were weaker-than-expected and existing-home sales fell to 5.44 million, their lowest level of the year.
European stocks edged higher on Thursday. Euro extended losses against the dollar while British Pound inched higher. The Stoxx Europe 600 closed 0.2% higher. Germany’s DAX 30 gained 0.1% closing at 12180.83. France’s CAC 40 lost 0.04% and UK’s FTSE 100rose 0.3% at 7407.06. Indices opened 0.1% – 0.2% higher today.
Today European Central Bank President Mario Draghi and Fed Chair Janet Yellen will speak at Jackson Hole symposium. No details about ECB’s much discussed start of tapering of its bond buying program in light of euro-zone’s improved economic performance is expected. ECB officials have said Draghi will not discuss future monetary policy. In economic news the second estimate of GDP growth in the UK was unchanged from preliminary reading at 0.3%, in line with expectations.
Asian stock indices are higher today. Nikkei gained 0.5% to 19452.61 supported by inflation report Japanese core consumer prices rose for the seventh straight month in July. Positive inflation data lifted yen against the dollar. Chinese stocks are higher: the Shanghai Composite Index is up 1.8% and Hong Kong’s Hang Seng Index is 1.1% higher. Australia’s All Ordinaries Index is 0.03% higher as the Australian dollar resumed the rise against the greenback.
Oil futures prices are advancing as production in US Gulf of Mexico area is being shut down after hurricane Harvey intensified approaching the mainland. About 10% of offshore US Gulf of Mexico crude output capacity has been halted. Brent for October settlement fell 1 % to end the session at $52.04 a barrel on the London-based ICE Futures exchange on Wednesday.
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