US stocks rise as Fed cuts rates but signals no further easing yet

September 19, 2019

By IFCMarkets

Dollar strengthens on strong housing data

US stocks extended gains on Wednesday as Federal Reserve cut its benchmark federal funds rate a quarter percentage point and the survey of Fed policy makers showed policymakers on average believed the Fed funds rate would be at present levels through the end of 2020. The S&P 500 edged up 0.03% to 3006.73. The Dow Jones industrial average advanced 0.1% to 27147. Nasdaq however lost 0.1% to 8177.39. The dollar strengthening resumed after data showing housing starts and building permits accelerated increases in August: 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, rose 0.3% to 98.54 but is lower currently. Stock index futures point to lower openings today.

DAX paces European indexes gains

European stocks resumed advancing on Wednesday led by banks and insurers. Both GBP/USD and EUR/USD turned lower yesterday with Pound sliding while euro edging higher currently ahead of the Bank of England policy meeting today. The Stoxx Europe 600 gained 0.1%. Germany’s DAX 30 advanced 0.14% to 12389.62. France’s CAC 40 gained 0.09% and UK’s FTSE 100 lost 0.1% to 7314.05 as consumer inflation slowed to annual rate of 1.7% after a 2.1% increase in July. It marked the slowest rate of increase since December 2016 . The Bank of England is expected to hold steady today.

Hang Seng falls while Asian indexes gain

Asian stock indices are mixed today ahead of US and Chinese deputy trade negotiators meeting in Washington. Nikkei gained 0.4% to 2044.45 despite yen resumed climb against the dollar as Bank of Japan held interest rates unchanged but hinted at a possible cut in October. Chinese stocks are mixed: the Shanghai Composite Index is up 0.5% while Hong Kong’s Hang Seng Index is 1.4% lower. Australia’s All Ordinaries Index recovered 0.5% as Australian dollar accelerated decline against the greenback after data showed unemployment ticked up to 5.3% in August from 5.2% in July.

HK50 declined below MA(200)    09/19/2019 Market Overview IFC Markets chart

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Brent gains despite build in US crude inventories

Brent futures prices are edging higher today. Prices fell yesterday after the Energy Information Administration report US crude inventories rose by 1.1 million barrels, while gasoline inventories gained by 0.8 million barrels. November Brent crude dropped 1.5% to $63.60 a barrel on Wednesday.

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