Upbeat earnings push stocks higher - 20.7.2017

S&P 500 and Nasdaq close at fresh record highs

US stocks ended higher on Wednesday as investors’ optimism was boosted by better than expected results from Morgan Stanley. The dollar rebounded: 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 up 0.2% at 94.808. The S&P 500 rose 0.5% settling at new record high 2473.83 lifted by gains in energy and materials stocks. All of the 11 main sectors advanced. The Dow Jones industrial average added 0.3% to 21640.75, as gains in DuPont and Boeing shares offset 4.2% drop in IBM on lower quarterly revenue. Nasdaq gained 0.6% to 6385.04, a fresh record high in the ninth session of consecutive gains.

Positive corporate results help push the market indices higher. Morgan Stanley shares rose 3.3% as the financial giant reported earnings and revenue above expectations. Financial stocks are seen as indicators of economy’s health positive earnings repot so far point to sustained economic growth. Treasury yields were little changed as investors waited for the European Central Bank policy meeting. Market’s reaction to economic data was muted. Housing starts at 1.22 million annual rate were higher than expected.

European stocks rebound

European stocks ended firmly higher on Wednesday on upbeat corporate reports. Both the euro and British Pound slid against the dollar. The Stoxx Europe 600 index rose 0.8%. Germany’s DAX 30 closed 0.2% lower to 12452.05. France’s CAC 40 ended 0.8% higher and UK’s FTSE 100 index gained 0.6% to 7430.91. Markets opened 0.2% - 0.6% higher today.

The European Central Bank is expected to leave interest rates unchanged today. The ECB head Mario Draghi is expected to emphasize the ECB’s confidence in euro-zone’s economic recovery. The central bank will likely not change its forward guidance after it dropped a reference to the possibility interest rates could move even lower in the future if warranted. Today at 13:45 CET ECB interest rate decision will be announced and at 15:30 CET Mario Draghi’s press conference will start.

GB 100

Bank of Japan pushes back inflation target timeline

Asian stock indices are higher today after gains on Wall Street. The Bank of Japan kept monetary policy unchanged and reinforced expectations that it will keep massive stimulus in place far longer than other major central banks. The yen slid against the dollar which helped Nikkei gain 0.6% to 20144.59. Economic data also contributed to bullish mood: both exports and imports rose in June, pointing to expansion in economic activity though the trade balance surplus was lower than in prior month. Chinese stocks are rising: Shanghai Composite Index is 0.4% higher and Hong Kong’s Hang Seng Index is up 0.3%. Australia’s All Ordinaries Index is 0.5% higher with the Australian dollar paring back most of previous day’s gains against the US dollar.

Oil higher after US inventory draw

Oil futures prices are edging higher today after US inventories official report indicated bigger than expected drop in inventories. US crude inventories dropped by 4.7 million barrels last week, according to the Energy Information Administration report. September Brent crude rose 1.8% to $49.70 a barrel on Wednesday on London’s ICE Futures exchange.