Playing off week’s data ahead of Good Friday : 25.03.2016 by IFC Markets
US stocks slightly edged lower paring early losses on Thursday as strengthening US dollar pushed down oil and commodity-related shares and financial companies stocks. Data on Thursday indicated the February durable goods orders fell less than expected while the jobless claims data highlighted the strength of the US labour market. US dollar index, a measure of a greenback’s value against a basket of six major currencies, rose for the fifth day to a fresh high of above 96.35. Dow Jones industrial average index edged up 0.08% to 17,515.73 and Nasdaq Composite advanced 0.1% to 4,773.51. The S&P 500 fell 0.04% to 2,035.94 which stopped its 5-week winning streak with 6 out of 10 its mains sectors closing in the black and telecommunications sector leading the growth. The indices began looking down after the hawkish comments of several Federal Reserve Banks Presidents that supported the April rate hike or advocated for at least two rate hikes till the end of the year. The US oil stockpiles data which exceeded the expectations pushed oil prices even lower. S&P 500 Financials were among the bottom performers having lost around 0.65%. The Swiss UBS downgraded the Wells Fargo rating to “sell” following its revenue outlook and credit risks. Wells Fargo, JP Morgan Chase and Citigroup weighted most on S&P 500 index yesterday. In general, the US indices show a good performance having rebounded from the 2016 lows mostly due to higher oil prices.
The trading volume on the US exchanges was lights on Thursday ahead of the Good Friday with US financial markets closed today. Nevertheless, several economic indicators are awaited today. At 13:30 CET the GDP price index for Q4 will be released, it is expected to fall from 1% to 0.9%. At the same time the annualized Q4 GDP, general and core personal consumption expenditures for Q4 are anticipated, the tentative outlook is neutral.
European stocks closed in the red on Thursday as energy sector was dragged lower by falling oil prices. Hotels and travel-related companies, including such airlines as Air France-KLM and Deutsche Lufthansa, edged up rebounding from the losses of a previous day caused by the terror attacks in Brussels, Belgium. The FTSEurofirst index lost 1.5% with thin volumes ahead of Eater holidays, the Germany’s Dax 30 index fell 1.71% while the France’s CAC 40 fell 2.13%. Since the start of 2016 FTSEurofirst has already lost around 8%. STOXX EUROPE 600 basic resources index which includes Anglo American, Glencore, Rio Tinto lost 1.6% on Thursday as stronger US dollar weighted on commodities. The EURUSD pair ended flat at $1.1174. Today on Friday the European markets are closed due to Good Friday.
Asian stocks were on the rise on Friday with Nikkei index up by 0.7% to 17,002.75 with a weekly advance of 1.7%. USDJPY added 0.04% to 112.96. Investors confidence was buoyed by weaker yen. Early on Friday morning the leading economic index and the coincident index were released in Japan better than expected. China’s stocks were advancing as well with blue-chip CSI index up by 0.5% and Shanghai Composite up by 0.6%.
Oil futures prices steadied on Thursday paring some of the losses on the news US oil rigs count fell by 15 rigs. Brent futures prices dipped below $40 a barrel. The front-month WTI futures fell to $39.46 a barrel having hit an intraday low of $38.33 while the front-month Brent futures slid almost 2% to $40.44 a barrel with their intraday low at $38.33.
Russia expressed its will to increase oil exports which highlighted the loopholes in a broadly-discussed deal of freezing oil output. The Russian Energy Minister Alexander Novak commented that "the discussion is only about freezing production. And not exports". Nevertheless, the discussion of the agreement itself has already pushed the oil prices up by about 1/3.