Santa rally continues - 4.1.2018

All three main US indices end at records

US stock market scaled new record highs on Wednesday after Federal Reserve meeting minutes showed policy makers are divided over the central bank’s projection of three rate hikes in 2018.. The dollar rebounded: 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 0.4% to 92.188. The S&P 500 rose 0.6% to new record high 2713.07 led by energy and technology shares up more than 1%. Eight of the 11 primary sectors ended in positive territory. The Dow Jones industrial average gained 0.4% closing at record 24922.68. Nasdaq composite index jumped 0.8% to fresh record 7065.53.

Positive economic data boosted market sentiment: the ISM manufacturing index rose to 59.7% in December from 58.2 in November, marking expanding manufacturing activity, and construction spending jumped 2.4% in November year over year. The dovish Federal Reserve minutes provided additional support for upbeat sentiment showing some policy makers thought three hikes in 2018 were too aggressive while others thought the pace of rate hikes was too slow.

Technology stocks lead European markets recovery

European markets rebounded on Wednesday led by technology stocks. The euro and British Pound pulled back against the dollar. The Stoxx Europe 600 closed 0.5% higher. Germany’s DAX 30 rose 0.8% settling at 12978.21. France’s CAC 40 gained 0.8% and UK’s FTSE 100 added 0.3% to 7671.11. Indices opened 0.3% - 0.7% higher today.

Gains in technology and retailer stocks led advancers while bank stocks declined as the new EU trading rules that include a new way of charging for investment research came into effect on Wednesday. Economic news were mixed: the number of unemployed people in Germany fell by 29,000 to 2.44 million in December, while the construction purchasing managers index in UK fell to 52.2 in December from 53.1 in November.

Nikkei leads Asian indices advances

Asian stock indices are higher today with investor confidence buoyed by upbeat economic data in the new year. Nikkei jumped 3.3% to 23506.33 on its first trading day of the year helped by continued yen weakness against the dollar. Chinese stocks are up as Caixin report showed activity in China's service sector expanded at a faster pace in December: both the Shanghai Composite Index and Hong Kong’s Hang Seng Index are 0.5% higher. Australia’s All Ordinaries Index added 0.1% despite renewed Australian dollar rally against the greenback.

NIKKEI

Oil up on Iran unrest

Oil futures prices are higher today on geopolitical concerns as protests in Iran continued. AT the same time the American Petroleum Institute late Tuesday report showed a 5 million barrel drop in US crude oil inventories to 427.8 million barrels last week. Prices ended higher yesterday: March Brent crude jumped 1.9% to $67.84 a barrel on Wednesday. Today at 17:00 CET the Energy Information Administration will release US Crude Oil Inventories.