By IFCMarkets
SP 500, Nasdaq close at fresh records
US stock market ended at record highs on Tuesday as the market opened after New Year holiday. The dollar weakened in the first session of 2018: 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, fell 0.5% to 91.84. The S&P 500 rose 0.8% to record high 2695.79 led by energy shares up 1.8%. Dow Jones industrial average gained 0.4% to 24824.01. The Nasdaq composite index jumped 1.5% to all-time high 7006.9.
The stock market rally, driven by improving corporate earnings and expectations of growth boost from fiscal stimulus measures like tax cuts, has elevated stock valuations to historical highs. After passing of the tax overhaul bill investors’ attention will focus on trillion dollar infrastructure spending programs proclaimed by President Trump during election. Better than expected economic data also provided support to stocks: the final reading of the US manufacturing purchasing manager’s index for December was upgraded to 55.1, compared with a preliminary reading of 55.0. A reading above 50 indicates an expansion in activity.
Stronger euro weighs on European stocks
European markets slipped on Tuesday weighed by stronger euro and Pound. Both the euro and British Poundcontinued their rally against the dollar. The Stoxx Europe 600 slipped 0.1%. The German DAX 30 lost 0.4% to 12871.39. France’s CAC 40 dropped 0.5% and UK’s FTSE 100 fell 0.5% to 7648.10. Indices opened 0.1% – 0.4% higher today.
Pound rose despite the decline to 56.3 of December manufacturing PMI in UK from 58.2 in November. Euro got a boost from European Central Bank policy maker Benoit Coeure comment over the weekend “there is a reasonable chance that the extension of our asset purchase program decided in October can be the last.” The ECB in October decided to extend its quantitative easing to the end of September 2018, although at a slower pace of €30 billion a month instead of €60 billion of monthly bond purchases.
Technology stocks lead Asian markets higher
Asian stock indices are higher today led by technology stocks tracking gains on Wall Street. Chinese stocks are extending gains: the Shanghai Composite Index is up 0.4% and Hong Kong’s Hang Seng Index is 0.2% higher. Japan’s markets are closed for holidays. Australia’s All Ordinaries Index is up 0.15% as Australian dollar rally against the greenback paused.
Oil steady
Oil futures prices are steady today as supply shortage concerns ease with the resumption of Forties North Sea pipeline operation and expectations of US crude oil output rise in 2018. Prices slipped yesterday: March Brent lost 0.5% to $66.57 a barrel Tuesday.
Market Analysis provided by IFCMarkets
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