Dow ends higher while SP500 slide continues - 9.10.2018

Dollar resumes strengthening

US equities edged lower on Monday while Dow ended marginally higher. The S&P 500 slipped 0.04% to 2884.43. Dow Jones industrial rose 0.2% to 26486.78. The Nasdaq composite index fell 0.7% to 7735.95. The dollar strengthening resumed on continuing gains in government bond yields: live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, added 0.15% to 95.754 and is higher currently. Futures on stock indices point to lower openings today.

SP500 testing MA(50) 10/09/2018 Market Overview IFCM Markets chart

Technology stocks have been under pressure on US-China trade war concerns which weighed on Chinese stock market. However US economic data have been strong recently, Federal Reserve plans to extend monetary policy tightening into 2020 as US economic performance is expected to remain strong, and companies in the SP 500 are estimated to post 10% earnings growth in 2019, according to FactSet.

European indices open higher

European stocks retreat continued on Monday led by Italian bank shares. Both EUR/USD and GBP/USD turned lower and are lower currently. The Stoxx Europe 600 index lost 1.1%. The DAX 30 dropped 1.4% to 11947.16 and France’s CAC 40 fell 1.1%. UK’s FTSE 100 slumped 1.2% to 7233.33. Markets opened 0.1% - 0.2% higher today.

Italy’s budget deficit concerns weigh on investor sentiment as Italian Deputy Prime Minister Matteo Salvini denounced European Commission President Jean-Claude Juncker and Economics Commissioner Pierre Moscovici as enemies of Europe. Earlier on Friday the EU had stated Italy’s budget targets are a source of concern in a letter to Italy’s economic minister Giovanni Tria. German economic data also added to downcast mood as the German industrial output fell 0.3% in August when an increase was expected.

NIKKEI falls after reopening

Asian stock indices are mixed today. Nikkei fell 1.3% to 23469.39 as the market caught up with regional declines while Japanese markets were closed for a holiday and yen gained against the dollar. Chinese shares rebounded after heavy selloff the previous day: the Shanghai Composite Index is up 0.2% while Hong Kong’s Hang Seng Index is 0.1% lower. Australia’s All Ordinaries Index extended losses 1% despite resumed slide of Australian dollar against the greenback.

Brent up

Brent futures prices rising today on reports Iran’s crude exports fell further in the first week of October as the start of US sanctions on November 4 on Iranian crude exports approaches. Prices ended lower yesterday: December Brent crude fell 0.3% to $83.91 a barrel on Monday.