US equities slip - 8.3.2018

Dow and SP 500 end lower while Nasdaq gains

US stocks slipped on Wednesday after White House economic adviser Gary Cohn’s resignation news spurred trade war fears. The dollar strengthened: 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 0.1% to 89.575. The S&P 500 slipped 0.05% to 2726.80, led by energy shares. The Dow Jones industrial fell 0.3% to 24801.36. Meanwhile Nasdaq composite index rose 0.3% to 7395.65. Stock indices futures point to mixed openings today.

Cohn was seen as a spokesperson for financial markets and the resignation of the president’s top economic adviser leaves the administrations with economic advisers considered less aligned with Wall Street interests, increasing protectionist stance of administration. The positive Beige Book release by the Federal Reserve provided some support for market sentiment. Fed reported “prices increased in all districts”, and “most districts saw employers raise wages and expand benefit packages in response to tight labor market conditions”. And ADP reported private sector employers added 235,000 jobs in February, the fourth month in a row where job gains were 200,000 or higher. But the Bureau of Economic Analysis reported the US trade deficit climbed 5% in January and hit a nearly 10-year high.

European stocks advance

European stock indices extended gains on Wednesday despite losses in metals producers shares. The euro extended losses against the dollar and the British Pound joined the slide. The Stoxx Europe 600 rose 0.4%. Germany’s DAX 30 jumped 1.1% settling at 12245.36. France’s CAC 40 rose 0.3% and UK’s FTSE 100 added 0.2% to 7157.84. Indices opened lower today.

Metals producers shares fell after President Trump said he’ll impose 25% tariffs on steel imports, and 10% on aluminum. The European Union said Wednesday it was discussing which US products it would hit with tariffs if Trump moves ahead with his plan. The European Central Bank is meeting today and expected to leave rates and its policy guidance unchanged.

Hang Seng leads Asian indices rebound

Asian stock indices are rising today after global weakness following Trump’s tariff announcement. Nikkei ended 0.6% higher at 21370.50 helped by yen turning lower against the dollar and upgrade in preliminary Q4 2017 GDP estimate. China’s stocks are higher after report of surging February exports: the Shanghai Composite Index is 0.5% higher and Hong Kong’s Hang Seng Index is up 1.7%. Australia’s All Ordinaries Index is up 0.7% despite rising Australian dollar against the greenback after bigger than expected trade surplus report for January.

HK50

Brent falls after US supplies build

Brent futures prices are retreating today. Prices slump yesterday after the US Energy Information Administration reported Wednesday that domestic crude supplies rose by 2.4 million barrels last week. May Brent crude fell 2.2% to $64.34 a barrel on Wednesday.