Energy shares lead markets higher - 5.4.2017

US stocks inch higher as investors await more data

US stock indices inched higher lifted by energy stocks. The dollar was flat: 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, closed little changed at 100.491. Dow Jones industrial average rose 0.2% to 20689.24 led by Caterpillar shares. The S&P 500 gained less than 0.1% settling at 2360.16 led by energy and materials stocks. The Nasdaq index added less than 0.1% to 5898.61.

Investors are cautious as they look for more data confirming US economic performance justifies the recent rally spurred by expectations of pro growth policies proclaimed by President Trump. Economic data were actually positive: the US trade deficit fell almost 10% to $43.6 billion in February, as exports increased to a 26-month high and auto imports fell. At the same time, factory orders rose 1% in February, in line with expectations. Jeffrey Lacker, president of the Richmond Fed, resigned on Tuesday after admitting that he was behind the leak of details of the Fed’s third round of asset purchases, known as QE3 to Medley Global Advisors in 2012. Today at 13:00 CET Mortgage Applications will be released in America. At 14:15 CET March Employment Change by ADP will be published , the tentative outlook is negative for dollar. At 16:00 CET March Services PMI will be published by the Institute for Supply Management. The outlook is positive for dollar. And at 20:00 CET FOMC meeting minutes will be released.

Miners and energy shares lead European stocks higher

European stocks ended slightly higher on Tuesday led by mining and energy stocks. The euro inched higher while British Pound weakened against the dollar. The Stoxx Europe 600 rose 0.2%, Germany’s DAX 30 closed 0.2% higher to 12282.34. France’s CAC 40 added 0.3% and UK’s FTSE 100 outperformed gaining 0.5% to 7321.82.

Oil majors led advancers: BP rose 1.7% after Deutsche Bank analysts upgraded the stock to buy from hold, shares of Total gained 1.7%. In economic news euro-zone retail sales rose 0.7% in February, beating forecasts of a 0.5% reading. Slowing of growth in UK construction activity in March, as the purchasing managers’ index for the sector fell to 52.2 from 52.5 in February, weighed on Pound. This helped lift UK’s FTSE 100: 75% of revenue generated by FTSE 100 constituents comes from abroad, so weaker Pound provides a boost. Today at 10:30 CET February Mortgage Approvals will come out in UK. The tentative outlook is neutral for Pound.

SP 500

Chines stocks lead Asian markets higher

Asian stock indices are rising today led by Chinese shares which rallied after mainland markets reopened following a long weekend. Chinese construction shares led the rally after Beijing on Saturday announced plans to build Xiongan New Area, modeled on the Shenzhen special economic zone next to Hong Kong that helped kickstart China's economic reforms in 1980. Shanghai Composite Index is up 1.5% while Hong Kong’s Hang Seng Index is down 0.2%. Nikkei closed 0.3% higher at 18861.27 in a choppy trade as yen was little changed against the dollar and investors refrained from big bets ahead of Trump-Xi Jinping meeting starting Thursday. Australia’s All Ordinaries Index is up 0.3% lifted by commodity stocks as Australian dollar edged higher against the dollar.

Oil prices rise ahead of inventory data

Oil futures prices are extending gains today supported by production outage in UK’s oilfield in the North Sea and American Petroleum Institute industry group report US crude stocks fell by 1.8 million barrels last week to 533.7 million. The Buzzard oil field in the North Sea, where the unplanned outage has occurred, produces about 180 thousand barrels per day. Prices closed higher on Tuesday, with June Brent crude closing 2% higher at $54.17 a barrel on London’s ICE Futures exchange. Today at 16:30 CET the Energy Information Administration will release US Crude Oil Inventories.