US stocks retreat in thin trading - 10.10.2017

SP 500, Dow and Nasdaq end lower

US stocks closed lower on Monday in thin trading. The dollar continued weakening: 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, fell 0.1% to 93.709. S&P 500 closed 0.2% lower settling at 2544.70 led by health care, industrial and financial stocks. Six out of 11 main sectors ended lower. The Dow Jones industrial average slipped 0.1% to 22761.07 weighed by 3.9% drop in GE shares. The Nasdaq composite index lost 0.2% to 6579.73, snapping nine session winning streak.

Trading was thin with banks closed in US for Columbus Day holiday. Traders were cautious to make big bets in thin trading as no major economic reports were released which could drive the markets. As investors await earnings reports with first quarterly bank reports scheduled for Thursday major investment banks are optimistic stock market performance will beat current expectations, despite trading near all-time highs.

European stocks rebound

European stocks rebounded on Monday as market sentiment was boosted by surprisingly good German industrial production data and easing of Spanish political unrest concerns. Both the euro and British Pound rose against the dollar. The Stoxx Europe 600 index rose 0.2%. The DAX 30 ended 0.2% higher at 12976.40. France’s CAC 40 rose 0.1%. UK’s FTSE 100 fell 0.2% to 7507.89. Indices opened mixed today.

Concerns about Catalonia possible cessation eased after hundreds of thousands of people gathered in Barcelona to protest possible declaration of independence by Catalonia. Spanish stocks recovered. Market sentiment got a lift also by much stronger than expected German industrial output report: German industrial output grew 2.6% on month in August when just 0.9% growth was forecast, pointing to renewed strong growth while the German coalition government talks have not started yet.

Asian markets advance

Asian stock indices are higher today shrugging off the slide on Wall Street overnight. Nikkei closed 0.6% higher at 20823.51 as markets opened after national holiday Monday with yen little changed against the dollar. Chinese stocks are up as China’s Statistics Bureau said the country will have no problem meeting its economic growth target of around 6.5% this year, and may even beat it. Shanghai Composite Index is 0.1% higher and Hong Kong’s Hang Seng Index is up 0.6%. Australia’s All Ordinaries Index is up less than 0.1% despite a rebound in Australian dollar against the greenback.

AU 200

Oil edges higher

Oil futures prices are inching higher today as OPEC said there were clear signs the market was rebalancing and US Gulf coast production was offline following Hurricane Nate. Prices rose Monday after OPEC’s secretary-general said “some extraordinary measures may have to be taken” to sustain the market’s rebalancing process into next year. The remark was interpreted implying extending output cuts agreed by OPEC and other oil producers. December Brent crude rose 0.3% settling at $55.79 a barrel on ICE Futures exchange in London on Monday.