US stocks advance despite technology slump - 27.6.2017

S&P 500 and Dow advance while Nasdaq slips

US stocks closed higher on Monday despite a renewed retreat of technology shares. The dollar strengthened recovering earlier losses after weak durable goods data: 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, gained 0.15% to 97.402. S&P 500 rose less than 0.1% settling at 2439.07 led by utilities and telecom stocks. The Dow Jones industrial average added 14.79 points closing at 21409.55, ending a four-day losing streak. The Nasdaq composite index lost 0.2% closing at 6251 , led lower by slump in technology giants Apple, Facebook and Alphabet.

Treasury yields declined after weaker than expected durable goods report: durable goods orders fell 1.1% in May. Capital goods orders, a measure of business investment, also dropped - 0.2%. Lower business investment undermines expectations of stronger growth in the second quarter after weak inflation readings in past three months. Fed Chair Yellen will speak today at 19:00 CET in London. Before that at 16:00 CET June consumer confidence index will be released by Conference Board, the outlook is negative for dollar. And Fed’s Harker will speak on economy at 17:00 CET in London.

Bank stocks lead European markets higher

European stock indices finished higher on Monday led by bank shares and Nestle. Both the euro and British Pound ended lower against the dollar. The Stoxx Europe 600 index rose 0.4%. The DAX 30 closed 0.3% higher at 12770.83. France’s CAC 40 outperformed gaining 0.6% and UK’s FTSE 100 added 0.3% to 7446.80.

Bank shares advanced on news the Italian government agreed to a financial rescue deal for closing two lenders – Veneto Banca and Banca Popolare di Vicenza, after the European Central bank declared the banks would fail. The government takes responsibility for liquidating bad loans and other items of two banks which could cost the taxpayers as much as 17 billion euros. Positive economic data also supported markets: German business sentiment hit a record in June with the Ifo business climate index rising more than expected to 115.1 from 114.6 in May.

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Asian stocks mixed ahead Yellen’s comments

Asian stock indices are mixed ahead of a discussion on global economic issues in London where Federal Reserve Chair Yellen’s comments about Fed’s rate hike plans for this year are expected. Nikkei closed 0.4% higher at 20225.09 supported by weaker yen against the dollar which boosted exporter stocks. Chinese stocks are mixed: the Shanghai Composite Index is up 0.2%, while Hong Kong’s Hang Seng Index is 0.1% lower. Australia’s All Ordinaries Index is down 0.1% as Australian dollar climbed higher against the greenback and mining stocks fell as industrial metals prices declined.

Oil recovery continues

Oil futures prices are edging higher today for a fourth session in a row driven by short covering as prices rose from ten month lows. Concerns about global inventory overhang are limiting gains despite efforts by the OPEC and major producers to cut global crude oil output 1.8 million barrels per day until March 2018. However production has increased in OPEC members Nigeria and Libya which are exempt from the cut, and US shale oil output has risen about 10% compared from a year ago. August Brent crude gained 0.6% settling at $45.83 a barrel on London’s ICE Futures exchange on Monday.