US markets rebound ahead of earnings reports - 18.4.2017

US indices rise ending three session slide

US stocks rebounded on Monday ending three session slide in a thin trading after Easter weekend. The dollar inched lower with the slowing of manufacturing activity in the New York area weighing on the greenback: 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, edged lower 0.2% to 100.293. The Dow Jones average rose 0.9% to 20636.92, led by Boeing and JP Morgan shares. S&P 500 added 0.9% settling at 2349.01 led by financial and real estate stocks, all 11 main sectors recording gains. The Nasdaq composite index ended 0.9% higher at 5856.79.

Stocks advanced after a pause in post-election rally as investors awaited economic data justifying high valuations. Equities were supported by Treasury Secretary Steven Mnuchin’s comment that a tax reform plan on President Trump’s desk before August was “highly aggressive to not realistic at this point.” The three main stock indices gained despite negative economic data: the Empire State manufacturing survey showed the gauge of manufacturing activity in the New York area fell to 5.2 in April, down from a two-year high of 16.4 in March. Traders will focus on incoming corporate reports with Bank of America due to report quarterly earnings on today before the bell. Today at 14:30 CET March Housing Starts and Building Permits will be released in US. An increase in building permits is expected while housing starts are forecast to fall. The tentative outlook is positive for the dollar. At 15:15 CET March Industrial Production and Capacity Utilization will be published, the outlook is positive for dollar.

European markets reopen after long Easter weekend

European markets are opening today after an extended Easter break. European stocks ended lower last week, with Stoxx Europe 600 index of the continent's top companies recording 0.2% weekly loss. Investors will be focusing on upcoming European company earnings ahead of the first round of France’s closely watched presidential election this Sunday. Both the euro and British Pound continue strengthening against the dollar today. No important economic data are expected in euro-zone.

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Asian stocks down

Asian stocks are mixed today amid concerns North Korea may soon test another nuclear bomb or missile after a failed missile launch on Sunday. Nikkei ended 0.4% higher at 18418.59 today with yen extending gains after US Treasury Secretary Mnuchin said he saw the dollar's strength over the long term as a positive, although he agrees with Trump's view that it hurts exports in the short term. Chinese stocks are lower today despite positive data showing expansion in industrial sector, which accounts for about one-third of the economy, drove China's better-than-expected first quarter economic growth: the Shanghai Composite Index is 0.9% lower while Hong Kong’s Hang Seng Index is 1.1% lower. Australia’s All Ordinaries Index ended 1% lower after a selloff in iron ore pulled down commodity shares while the Australian dollar fell against the dollar.

Oil prices lower on expected US output rise

Oil futures prices are extending losses today on expected rise in US shale oil production. Prices retreated the previous day as the Energy Information Administration monthly report forecast a rise of 123 thousand barrels a day in May in US shale oil output, the biggest monthly gain in more than two years. At the same time Saudi Arabia's energy minister has said it was too early to discuss an extension to the six-month global deal to cut output beyond June. June Brent crude fell 1% to $55.36 a barrel on Monday on London’s ICE Futures exchange.