Technology shares lead US equities higher - 19.7.2017

Nasdaq and S&P 500 hit new records while Dow slips

US stocks closed at record highs on Tuesday led by technology stocks. 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 0.5% to 94.66. The S&P 500 added 1.47 points settling at record high 2460.61 as gains in technology stocks offset losses in telecom and energy shares. Dow Jones industrial average fell 0.3% closing at 21574.73 dragged by 2.6% drop in Goldman Sachs shares as the company reported a 40% decline in trading revenue. The Nasdaq composite index rose 0.5% to fresh record high 6344.31 in an eighth winning session in a row.

Stock market rally, driven by expectations of President Trumps pro-growth policy promises, had stalled on concerns stock valuations are at historical highs. Positive earnings reports boosted investor confidence with Netflix shares jumping 13.5% on better than expected results, leading tech stocks higher. Treasury yields declined after Trump’s administration failed to win support for the health care legislation. In economic news both US import prices and home builders’ confidence index fell in June.

European markets retreat

European stocks ended lower on disappointing earnings reports. The euro rose to fourteen-month high against the dollar while British Pound extended losses. The Stoxx Europe 600 fell 1.1%. Germany’s DAX 30 lost 1.3% closing at 12430.39. France’s CAC 40 retreated 1.1% and UK’s FTSE 100 slipped 0.2% to 7390.22. Markets opened 0.3%-0.4% higher today.

Continued euro rally ahead of the European Central Bank Thursday policy meeting also weighed on regional indices. Stronger euro makes products of European exporters more expensive and less competitive. The Greek government postponed plans to issue new debt in the global bond market as it waits for a debt sustainability analysis from the International Monetary Fund. In economic news the ZEW institute reported German economic sentiment dropped in July, but the outlook for Europe’s largest economy continues to be favorable. UK inflation eased to 2.6% in June.

Asian markets advance

Asian stock indices are higher today underpinned by upbeat economic data from China. Nikkei rose 0.1% to 20020.86 as yen was little changed against the dollar. Chinese stocks are rising: the Shanghai Composite Index is 1.4% higher and Hong Kong’s Hang Seng Index is up 0.5%. Australia’s All Ordinaries Index is up 0.8% despite continued rise of Australian dollar against the greenback.

Nikkei 225

Oil higher ahead of US inventory report

Oil futures prices are rising today ahead of the official US inventory report. Prices ended higher yesterday on news Saudi Arabia is considering a 1 million barrel-a-day cut to its crude exports. September Brent crude rose 0.9% to $48.84 a barrel on London’s ICE Futures exchange on Tuesday. The American Petroleum Institute reported 1.6 million barrels rise in US inventories last week to 497.2 million barrels. Today at 16:30 CET the Energy Information Administration will release US Crude Oil Inventories. Analysts polled by S&P Global Platts expect a decline of 3 million barrels in crude inventories.