SP500 snaps six-day winning streak - 18.9.2018

Technology shares slump

US stock market retreated on Monday as technology sector slumped ahead of President Trump’s announcement on imposing tariffs on additional $200 billion Chinese imports. The S&P 500 fell 0.6% to 2888.80. Dow Jones industrial lost 0.4% to 26062.12. The Nasdaq composite index dropped 1.4% to 7895.79. The dollar strengthening reversed: 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 0.5% to 94.478 and is lower currently. Futures point to higher openings today.

SP500 rally unabated 09/17/2018 Market Overview IFCM Markets chart

US and Canada negotiations continued with no apparent resolution to contentious issues such as opening of Canadian dairy market for US producers and crapping of trade dispute mechanism of old North American Free Trade Agreement. Economic data were mixed: the Institute for Supply Management’s August read on the services sector rose to 58.5% from 55.7% in the previous month, while the US created 163,000 private sector jobs in August, according to payrolls processor ADP. This was below the forecast of 182,000 new jobs.

FTSE 100 opens lower than other European markets

European stocks extended gains on Monday. The GBP/USD turned higher on Brexit talks optimism but is lower currently. The EUR/USD reversed the slide on talks Italy’s economy minister will discuss with prime minister efforts to keep budget deficit within European Union’s budget deficit rules. It is moving higher currently. The Stoxx Europe 600 index gained 0.1%. The DAX 30 however lost 0.2% to 12096.41 and France’s CAC 40 slipped less than 0.1%. UK’s FTSE 100 slid less than 0.1% to 7302.10. Indices opened down to flat today

Mixed Germany data did little to boost market sentiment: factory orders in Europe’s largest economy fell 0.9% over yar in July when a 1.9% increase was expected, while construction sector activities expanded in August.

Chinese stocks lead Asian indices rebound

Asian stock indices are mostly higher today despite 10% tariffs on about $200 billion worth of Chinese imports President Trump announced Monday, threatening to levy duties on an additional $267 billion of Chinese goods if Beijing retaliates. Nikkei jumped 1.4% to 23420.54 helped by resumed yen slide against the dollar. Chinese stocks are rising on hopes Beijing will step up infrastructure investment to offset the impact of the latest tariff: the Shanghai Composite Index is up 1.8% and Hong Kong’s Hang Seng Index is 0.7% higher. Australia’s All Ordinaries Index however turned 0.4% lower as Australian dollar continued the rebound against the greenback.

Brent falls

Brent futures prices are extending losses today with concerns about impact of US sanctions on Iranian oil providing some support. Prices fell yesterday: November Brent crude settled 0.05% lower at $78.05 a barrel on Monday.