Global equities advance as geopolitical tensions ease - 19.9.2017

Dow and SP 500 close at fresh record highs

US stocks advanced on Monday as North Korea tensions subsided. The dollar recovered: 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, rose 0.2% to 92.022. S&P 500 closed 0.2% higher settling at record high 24503.87, led by financial and materials stocks. The Dow Jones industrial average rose 0.3% to 22331.35, fifth record close in a row. The Nasdaq composite index added 0.1% closing at 6454.64.

SP 500

European stocks rebound

European stock indices rebounded on Monday as investors’ risk appetite recovered following North Korea’s Friday launch of a missile over Japan. The euro rose against the dollar but British Pound slipped. The Stoxx Europe 600 index rose 0.3%. The DAX 30 added 0.3% to 12559.39. France’s CAC 40 gained 0.3%. UK’s FTSE 100 rose 0.5% to 7253.28. Indices opened lower today.

Pound eased after Bank of England Governor Carney said that the UK economy will likely grow slower than other G-7 nations until mid-2018 due to Brexit uncertainties. Gains in German stocks were limited by Bundesbank report German economic growth may have lost some momentum during the third quarter as some economic indicators at the start of the summer quarter were softer than expected. Nevertheless the central bank expects German economy will continue strong growth. In other economic data euro-zone headline inflation rose to 1.5% in August, according to Eurostat. Inflation was 1.3% in July.

Asian stocks retreat

Asian stock indices are mostly lower today. Nikkei jumped 2% to 20299.38 helped by yen weakness against the dollar as Japanese markets reopened after a public holiday Monday. Chinese stocks are retreating: the Shanghai Composite Index is down 0.4% and Hong Kong’s Hang Seng Index is 0.2% lower. Australia’s All Ordinaries Index is down 0.1% as Australian dollar resumed the climb against the greenback.

Oil higher after lower Saudi output report

Oil futures prices are rising today supported by report Iraq’s crude oil production is at 4.32 million barrels per day (bpd) currently compared to almost 4.5 million bpd in May and June. Prices fell Monday after a report from the Energy Information Administration the US output from seven major shale plays is expected to climb 79,000 bpd in October, to 6.083 million bpd. November Brent crude rose 0.3% settling at $55.48 a barrel on London’s ICE Futures exchange on Monday.