All three main US indices slip

January 11, 2018

By IFCMarkets

S&P 500, Nasdaq break six-day win streak

US stock indices pulled back on Wednesday as the rise in Treasury yields accelerated after a report that China is considering halting purchases of US debt. The dollar weakened: 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, fell 0.2% to 92.348. The S&P 500 lost 0.1% to 2748.23. The Dow Jones industrial slipped less than 0.1% closing at 25369.13. Nasdaq composite index slid 0.1% to 7153.57. Futures point to higher market openings today.

The yield on the 10-year benchmark Treasury note rose 4 basis points to an intraday high 2.59% after a report that China is considering halting or cutting its purchases of US government paper. It is not clear whether such a move is considered in course of a regular policy assessment in order to diversify more state reserve holdings amounting to $3.1 trillion, or trade tensions with the US are seen as reason for slowing investment in American debt. Separately Reuters reported that Canada was growing increasingly convinced that President Donald Trump was going to announce that the US would exit Nafta. In economic data import prices rose 0.1% in December and wholesale inventories grew 0.8%, up from a 0.4% decline in November.

Bank shares outperform European indices

European stock indices pulled back on Wednesday with gains in bank shares limiting losses. The euro rose against the dollar while British Pound continued the slide. The Stoxx Europe 600 closed 0.4% lower. Germany’s DAX 30 fell 0.8% settling at 13281.34. France’s CAC 40 lost 0.4% while UK’s FTSE 100 added 0.2% to record high 7748.51. Indices opened 0.1%-0.2% higher today.

Bank shares rose as rising US long term bond yields improved profit outlook for lenders active in US market. In economic news French industrial production fell 0.5% in November, while UK manufacturing output rose 0.4% in November. At the same time, the UK goods trade deficit widened slightly in November.


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Asian indices mixed

Asian stock indices are mixed today on concerns about rising US protectionism. Nikkei ended 0.4% lower at 23695 despite yen weakness against the dollar. Chinese stocks are up as China’s central bank injected short term funds for the first time in three weeks: the Shanghai Composite Index is 0.1% higher and Hong Kong’s Hang Seng Index is up 0.04%. Australia’s All Ordinaries Index lost 0.5% as Australian dollar extended gains against the greenback on stronger than expected retail sales in November.

AU200

Oil down

Oil futures prices are lower today on concerns inventories in Asia and the United States remain ample. Prices rose yesterday supported by the US Energy Information Administration report domestic crude supplies fell 5 million barrels to 419.5 million. However US gasoline stocks rose 4.1 million barrels, more than expected. March Brent crude rose 0.6% to $69.20 a barrel on Wednesday.

Market Analysis provided by IFCMarkets

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