Technology leads SP 500 recovery - 15.6.2018

Nasdaq hits fresh record

US stock market recovered on Thursday led by technology stocks. The S&P 500 rose 0.3% to 2782.49. Dow Jones industrial average however slipped 0.1% to 25175.31. The Nasdaq composite gained 0.9% to 7761.04, fresh record high. The dollar strengthened sharply: 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, jumped 1.4% to 94.85 and is rising currently. Stock index futures indicate lower openings today.

Upbeat economic data supported the market sentiment after market pullback following hawkish Federal Reserve statement the previous day. Stocks reversed earlier gains after technology shares sold off. Retail sales jumped by 0.8% in May, twice as high as expected. Initial jobless claims dropped by 4,000 to 218,000 last week. Also, the import price index in May rose by 0.6% for the second straight month, further evidence of building inflation. Separately, business inventories in the US rose 0.3% in May to rebound from a decline in the prior month.

European indices rally on dovish ECB decision

European stock indices rallied on Thursday as the euro slumped following the European Central Bank’s plan to keep interest rates low for at least another year. Both the euro and British Pound turned sharply lower against the dollar and are down currently. The Stoxx Europe 600 index jumped 1.2%. Germany’s DAX 30 rallied 1.7% to 13107.10. France’s CAC 40 rose 1.4% and UK’s FTSE 100 gained 0.8% to 7765.79. Indices opened mixed today.

The European Central Bank said it would continue buying 30 billion euros a month of bonds through September, as planned, reducing the purchase amount in October to 15 billion euros a month and running purchases through the end of December. The purchases will end in December. The ECB said rates will remain at their present lows “at least through the summer of 2019.”

Asian markets mixed

Asian stock indices are mixed today as traders contemplate rising trade war tensions after President Trump enacted $50 billion tariffs on Chinese goods. Nikkei ended 0.5% higher at 22851.75 despite yen reversal higher against the dollar. Chinese stocks are lower despite continued increase in China’s new home prices in May: the Shanghai Composite Index is 0.7% lower and Hong Kong’s Hang Seng Index is down 0.4%. Australia’s All Ordinaries Index is up 1.3% as Australian dollar extended losses against the greenback following sharp decline previous day.

AU200

Brent slips

Brent futures prices are extending losses today as Saudi Arabia and Russia indicated ahead of a key OPEC meeting in Vienna next week that output could rise. They ended lower yesterday: Brent for August settlement closed 1% lower at $75.94 a barrel on Thursday.