US market advances as technology stocks rally - 6.7.2017

S&P 500 and Nasdaq advance while Dow slips

US markets ended higher on Wednesday as Federal Reserve policy meeting minutes indicated central bank may start reducing its balance sheet soon and technology stocks rallied. The dollar weakened marginally: 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, closed down 0.05% at 96.20. The S&P 500 added 0.2% settling at 2432.54 lifted by gains in technology, health care and financial stocks. The Dow Jones industrial average slipped less than 0.1% to 21478.17, as losses in Nike, Chevron and Exxon Mobil shares offset gains in Boeing, Intel and Microsfot. Nasdaq rose 0.7% to 6150.86.

Treasury yields inched lower after minutes from the Federal Reserve’s June meeting reaffirmed the central bank’s measured approach to lifting rates and shrinking its $4.5 trillion balance sheet. Minutes showed several members were in favor of starting a reduction of the central bank’s crisis-era balance sheet while they were divided on inflation and unemployment. Policy makers justified monetary tightening by citing falling and low unemployment which would push up wages and cause higher inflation if not acted timely. But critics of the central bank’s shift to tightening stance point to recent lower inflation readings, calling on Fed to wait until sustained inflation above 2% target level is achieved. Fed chair Janet Yellen suggested recent weakness in inflation data is transitory. Against this background investors will be focused on private-sector ADP Inc. employment change data today and Friday’s labor-market report.

SP 500

European stocks rebound

European stock indices ended mostly higher on Wednesday despite a slump in energy stocks. Both the euro and British Pound gained against the dollar. The Stoxx Europe 600 index rose 0.2%. Germany’s DAX 30 added 0.1% to 12453.68. France’s CAC 40 ended 0.1% higher and UK’s FTSE 100 index gained 0.1% to 7367.60.

4.9% jump in Adidas shares helped the regional stock index after a ratings upgrade to buy from hold by HSBC. In economic news, euro-zone economic activity expanded in June: euro-zone final composite PMI for June came in at 56.3 compared with 55.7 in May.

Asian stocks lower amid uncertainty

Asian stock indices are mostly lower today as investors adopted a wait-and-see approach ahead of the G20 nations meeting in Germany amid high geopolitical tensions after North Korean missile launch. Nikkei ended 0.4% lower at three-week low 19994.06 as the dollar resumed the growth against the yen. Chinese stocks are mixed: Shanghai Composite Index is 0.2% higher while Hong Kong’s Hang Seng Index is down 0.2%. Australia’s All Ordinaries Index is 0.1% lower with the Australian dollar little changed against the US dollar.

Oil higher on expected US inventory draw

Oil futures prices are edging higher today after the American Petroleum Institute reported late Wednesday a much larger-than-expected drop of 5.8 million barrels in US crude supplies. Prices fell sharply the previous day after a report that Russia opposes any further restrictions on oil supply other than the cuts already agreed. The Organization of the Petroleum Exporting Countries and major producers including Russia in May extended a deal to cut production into the first quarter of 2018. September Brent crude fell 3.7% to $47.79 a barrel on Wednesday on London’s ICE Futures exchange. The US Energy Information Administration will release US crude inventories at 17:00 CET today.