By IFCMarkets
US stocks rebound on oil and surprisingly strong service sector report
US stocks rebounded on Wednesday as market sentiment was boosted by higher oil prices and positive services sector data. The dollar continued the recent uptrend.
The live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six major currencies, inched 0.02% higher to 96.121. The Dow Jones industrial average rose 0.6% to 18281.03 with shares of Caterpillar and Goldman Sachs, up more than 2%, leading the blue chip index higher. The S&P 500 gained 0.4% settling at 2159.73 led by financial and energy stocks. The Nasdaq added 0.5% closing at 5316.02. The Institute for Supply Management’s services index jumped to 57.1 in September from 51.4 in August, providing support to expectations for a rate hike before the end of the year. The services sector expanded at the fastest pace in 11 months. Federal Reserve signaled at September meeting it plans one rate hike this year if US economic data are good. The Automatic Data Processing Inc. reported that private sector employers added 154000 jobs last month, down from 175000 in August. The ADP reports are used as a predictor for the important nonfarm payrolls which are due on Friday. The numbers are good enough to expect the labor market strength endures, which supports the case for a rate hike by the end of the year. In other economic news, US trade deficit rose 3% in August. Today at 13:30 CET September Challenger Job Cuts will be published. At 14:30 CET Initial Jobless Claims and Continuing Claims will be released, the tentative outlook is positive for dollar. And at 16:30 CET Natural Gas Storage Change will be released by the Energy Information Agency.
ECB tightening concerns weigh on European stocks
European stocks slipped on Wednesday weighed by concerns the European Central Bank may gradually wind down its monthly bond purchases before the scheduled end of the program in March. The euro and Pound inched higher against the dollar with the Pound not far from multi-decade lows
The Stoxx Europe 600 closed 0.6% lower after six-session win streak. Stocks ended lower despite the ECB later denied it considered scaling back monthly 80 billion euros ($89.7 billion) purchases of bonds. In other economic news the final reading of euro-zone Service PMI came in at 52.6, compared with 52.9 in August. Germany’s DAX 30 index closed 0.3% lower at 10585.78. France’s CAC 40 lost 0.3% and UK’s FTSE 100 fell 0.6% to 7033.25. Today Factory Orders for August came in higher than expected in Germany, at 1% on month compared with 0.3% gain in July. At 13:30 CET European Central Bank Policy Meeting Minutes will be released in euro-zone.
Asian markets advance on positive US data
Asian stocks are rising today following advances on Wall street overnight on positive US services sector report. Nikkei gained 0.5% to 16899.10 today with weaker yen supporting increased risk appetite. Hong Kong’s Hang Seng Index is 0.5% higher lifted by energy shares as oil rose overnight and investors built positions ahead of next week’s reopening of China’s market. China’s market reopens on Monday after National Day holidays this week. Australia’s All Ordinaries Index gained 0.5% with Australian dollar continuing decline against the greenback.
Saudi Arabia cuts flagship price to Asia
Oil futures prices are pulling back today following Saudi Arabia’s announcement it cut the price of its flagship physical crude to Asia. Prices jumped on Wednesday after US Energy Information Agency reported that crude stockpiles fell 3 million barrels last week to 499.74 million barrels. This was a fifth weekly drop in a row. December Brent crude rose 2% to $51.86 a barrel on London’s ICE Futures exchange on Wednesday.
Market Analysis provided by IFCMarkets
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