US stocks slip on mixed data

By IFCMarkets

Nasdaq posts second record high in a row

US stocks ended lower on Tuesday on lackluster economic reports. The dollar accelerated the slide after weaker than expected housing data: 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, ended 0.7% lower at 98.214. Dow Jones industrial average fell less than 0.1% to 20979.75, with losses led by Nike, UnitedHealth and Pfizer outweighing gains in Microsoft and IBM. The S&P 500 slipped less than 0.1% settling at 2400.67 led by telecom and utilities stocks, with nine out of 11 main sectors ending in the negative territory. The Nasdaq index closed 0.3% higher at 6169.87, the second record high in a row.

The stock market rally which was spurred by expectations of expansionary policy measures pledged by President Trump during election campaign appears to have stalled on doubts Trump will be able to push through his pro-growth agenda. The S&P 500 index recorded its 15th straight session with a daily change of 0.5% or less, the longest such streak since February 1969, according to Dow Jones data. Recent data were mixed: the Commerce Department reported housing starts in April grew 2.6% to a 1.17 million annual pace, slower than the 1.26 million expected rate. Investors shrugged off better than expected industrial production data: industrial production rose 1.0% from a month earlier, the largest gain in more than three years. Today at 13:00 CET Mortgage Applications will be released in America.

European stocks slip on disappointing earnings updates

European stocks slipped on Tuesday on disappointing earnings updates. Both the euro and British Pound strengthened against the dollar. The Stoxx Europe 600 ended down less than 0.1%. Germany’s DAX 30 slipped less than 0.1% closing at 12804.53. France’s CAC 40 lost 0.2% while UK’s FTSE 100 outperformed ending 0.9% higher at 7522.03, a record high.

Losses in car manufacturer stocks after data showed European car registrations fell 6.6% in April and stronger euro, boosted by optimism after French President Emmanuel Macron and German Chancellor Angela Merkel signaled a move to strengthen the euro-zone, weighed on German index. A near 4% rise in Vodafone on upgraded earnings growth forecast lifted the FTSE 100 index and Europe’s telecom sector. The FTSE 100 hit a record high despite a stronger Pound buoyed by UK inflation data showing consumer prices rose 2.7% in April, more than the 2.5% expected. In other economic news, euro-zone economy expanded 0.5% in the first quarter according to the second GDP estimate and in line with forecasts. Today At 10:30 CET job market data will be released in UK. The tentative outlook is neutral for Pound. At 11:00 CET final April euro-zone inflation data will come out, the outlook is neutral for euro.

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Asian stocks slide

Asian stock indices are lower today with investor risk appetite undermined by US political turmoil after media reports said President Donald Trump asked then-FBI Director James Comey to end a probe into Trump’s former national security advisor. Nikkei fell 0.5% to 19814.88 as yen slide against the dollar continued and financial stocks slumped hit by lower US yields. Chinese shares are lower: both Shanghai Composite Index and Hong Kong’s Hang Seng Index are down 0.2%. Australia’s All Ordinaries Index lost 1% as banking stocks tumbled following prime minster’s warning regulators will be watchful if banks try to increase interest rates or charges in response to a proposed levy on the country’s five big banks released last week. Australian dollar eased against the greenback.

Oil prices recover ahead of inventory data

Oil futures prices are edging higher today after Tuesday’s decline following the American Petroleum Institute report US crude oil inventories rose by 882 thousand barrels last week to 523.4 million barrels. The uptick in US stock raised concerns global market oversupply continues despite efforts by top producers Saudi Arabia and Russia to extend a 1.8 million barrels per day crude supply cut by the Organization of the Petroleum Exporting Countries and some other producers until the end of March 2018. The International Energy Agency report on Tuesday that commercial oil inventories in industrialized countries rose by 24.1 million barrels in the first quarter of 2016, despite the cuts, also weighed on oil prices. July Brent crude closed 0.3% lower at $51.65 a barrel on London’s ICE Futures exchange on Tuesday. Today at 16:30 CET the Energy Information Administration will release US Crude Oil Inventories.

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