This article is originally referred from IFC Markets Market Overview
US stocks ended lower on Monday as oil prices tumbled while technology stocks outperformed, pulling Nasdaq Composite Index to more than a year high. The dollar strengthened. According to the live dollar index data the ICE US Dollar Index, a measure of the dollar’s value against a basket of six major currencies, rose 0.2% to 95.752. The Dow Jones industrial average lost 0.2% settling at 18404. The S&P 500 slipped 0.1% to 2,170.84 with 3.3% drop in the energy stocks outweighing small gains in health-care and tech stocks. The Nasdaq composite rose 0.4% closing at 5184.20, highest close since July 21, 2015, helped by 1.8% jump in Apple. Market sentiment was undermined by mixed economic data which showed ISM manufacturing index fell to 52.6 in July from 53.2 in June while Markit’s final PMI for July rose to 52.9, compared with 51.3 in previous month. Lower ISM manufacturing index together with an 0.6% decline in construction spending in June added to recent negative data such as disappointing Q2 GDP, spurring concerns US economic recovery may be faltering. Investors will be focusing on earnings reports to gauge the health of corporate sector: so far, about two-thirds of S&P 500 companies have announced quarterly results with 71% beating on earnings and 57% reporting revenues above estimates. Today at 14:30 CET June personal spending and personal consumption expenditures price index will be published in US. The tentative outlook is negative for dollar.
European stocks closed lower on Monday as bank stocks declined on disappointing stress tests. The euro strengthened against the dollar while the Pound edged lower after the decline to 48.2 in Manufacturing PMI for July indicated a sharp contraction in UK manufacturing sector. Disappointing results of stress tests designed to show the impact of a sharp downturn on bank’s capital indicated Italian, Irish and Spanish banks would be hardest hit of the 51 firms tested. UniCredit and Barclays shares lost 9.4% and 2%, respectively, Deutsche shares closed 1.8% lower. Germany’s DAX 30 index slipped 0.1% to 10330.52. France’s CAC 40 fell 0.7% to 4409.17 and UK’s FTSE 100 dropped 0.5% to 6693.95. In other economic news final euro-zone manufacturing PMI for July came in at 52.0, up from a flash estimate of 51.9 after June’s reading of 52.8. Today at 10:30 CET July Construction PMI will be published in UK, the tentative outlook is negative for Pound. At 11:00 CET June Producer Price Index will be released in euro-zone, the tentative outlook is negative for euro.
Asian stocks are retreating today with Australia’s All Ordinaries Index down 0.85% despite the decision by the Reserve Bank of Australia’s to cut its benchmark interest rate by 0.25 percentage point to an all-time low of 1.5%, as expected. Trading in Hong Kong was suspended for the day because of the Typhoon Nida, Shanghai Composite Index is 0.27% higher. Nikkei fell 1.47% today after rising for two sessions as yen strengthened with investors waiting for the details of government’s 28 trillion yen ($274 billion) stimulus plan to be announced later in the day. It is expected new direct spending will total only about ¥7.5 trillion over two years, less than the ¥10 trillion package Abe introduced in his first year in office.
Oil futures prices are recovering today after settling sharply lower on concerns about global oversupply of crude and gasoline. US oil futures finished in bear-market territory on Monday with September West Texas Intermediate crude futures falling 3.7% to $40.06, a three-month low. A bear market is defined as a fall of 20% from a recent peak. WTI futures briefly traded below the psychologically important $40 a barrel level before paring losses. The outlook for oil market is bearish as crude oil output is up slightly in the United States and also rising in OPEC-member Iraq.
Original Source: IFC Markets Market Overview