By IFCMarkets
US stocks recovered Monday on receding US-China trade war fears. The S&P 500 rose 0.7% to 2733.01 led by industrial stocks up 1.5%. Dow Jones industrial rallied 1.2% to 25013.29. The Nasdaq composite index advanced 0.5% to 7394.04. The dollar weakened: live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, fell 0.2% to 93.50 but is up currently. Stock indices futures indicate higher openings today.
Market sentiment was buoyed after Treasury Secretary Steven Mnuchin’s comment over the weekend that the Trump administration would delay implementation of tariffs on Chinese goods and “put the trade war on hold” while the countries are negotiating. There were reports China agreed to buy more US goods to narrow the trade deficit between the two economies but didn’t agree to the specific US target of $200 billion. Treasury yields remained elevated. Philadelphia Fed President Patrick Harker said he would support two to three more rate hikes this year if inflation accelerated, while Atlanta Fed President Raphael Bostic said the central bank should move to a price-targeting regime that would allow inflation to temporarily overshoot 2%. In economic news, the Chicago Federal Reserve’s national activity index for April edged up to 0.34, from 0.32 in the previous month.
European stock indices rebounded on Monday as US-China trade war concerns eased. The British Pound’s accelerated the slide against the dollar while euro turned higher with both currencies receding against dollar currently. The Stoxx Europe 600 index rose 0.3%. France’s CAC 40 ended 0.4% higher and UK’s FTSE 100 rallied 1% to 7859.17. Germany’s stock market was closed for Whit Monday. Markets opened 0.03% – 0.4% higher today.
Italian stock market fell after reports the newly formed antiestablishment government is considering to widen budget deficit through tax cuts and spendings amounting to 100 billion euros.
Asian stock indices are mostly lower today. Nikkei lost 0.2% to 22960.34 despite continued yen slide against the dollar. The Shanghai Composite Index is up 0.02%. Hong Kong stock market is closed for a holiday. Australia’s All Ordinaries Index is down 0.7% as the Australian dollar continued rising against the US dollar.
Brent futures prices are pulling back today on rising US output. Prices closed edging higher today. Prices rallied yesterday on fears the US could impose new sanctions on Venezuela after US Secretary of State Mike Pompeo said the US will “take swift economic and diplomatic actions to support the restoration of democracy” following weekend elections in the country that were viewed as illegitimate by the opposition and foreign governments. July Brent crude settled 0.9% higher at $79.22 a barrel on Monday.
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