World markets continue rising on Tuesday
US stocks closed at record high for a fifth straight trading session on Tuesday. Stocks posted marginal gains in thinly traded sideways session as no major economic data were released during the day. The S&P 500 added 1.42 points to 2,039.68, registering a fresh record. The Dow Jones Industrial Average climbed 1.2 points, or less than 0.1 percent, to a record 17,614.90. The Nasdaq Composite rose 8.94 points, or 0.2%, to 4,660.56. The single piece of economic data released in a day absent of significant economic statistics due to the Veterans Day holiday, the National Federation of Independent Business reported its small-business optimism index rose 0.8 point to 96.1 in October, a two-month high. And in a CNBC interview Charles PLosser, Philadelphia Fed president, said that even though inflation was below the Fed’s preferred level of 2 percent, there was no reason to keep interest rates at current crisis-era levels, especially with U.S. unemployment now so low. He is among the minority of Fed officials who support ending the ultra easy monetary policy sooner than mid 2015. The Fed statement last month reconfirmed that interest rates will be kept low for a “considerable time”, but tied a rate hike more closely to economic data. Today at 16:00 CET the Wholesale Inventories mom for September will be released in US, with the forecast of 0.3% against the previous month’s actual number of 0.7% . At 18:00 CET Federal Reserve Bank of Minneapolis President Narayana Kocherlakota will deliver a speech titled “Clarifying the Objectives of Monetary Policy” in Wisconsin.
Major European benchmarks ended the trading session on Tuesday higher for a second straight day. Investor optimism in Europe was boosted by upbeat earnings reports. The Stoxx Europe 600 index closed up 0.4% at 338.93, building on a 0.7% gain from Monday. France’s CAC 40 index added 0.5% to 4,244.53, while Germany’s DAX 30 index gained 0.2% to 9,369.03. The UK’s FTSE 100 index put on 0.2% to 6,627.40, moving higher for a fifth straight day. Vodafone Group PLC , Henkel AG and Royal Vopak NV gained 5.4%, 4.6% and 1.9% after reporting improved performance and revenues. Today at 11:00 CET euro zone Industrial Production data will be released. And at 11:30 CET the Bank of England Inflation Report will be published after employment data at 10:00 CET. Economists expect that the Governor Mark Carney is likely to signal that British interest rates will stay at a record low until around the middle of next year, and the Bank is likely to revise downward the forecasts for growth and inflation it published three months ago because of euro zone economy slowdown and falling oil prices. This will likely result in weakening of the British pound sterling. And tomorrow in the morning at 08:00 CET German Consumer Price Index YoY for October will be released, the outlook is neutral as the CPI is expected to stay unchanged at the level of 0.8%. Two hours later at 10:00 CET on Thursday the ECB publishes its Monthly Report. Asian markets were mixed on Tuesday. Hong Kong stocks rose for a second straight day, as investors squeezed some more gains out of news that the long-awaited Hong Kong-Shanghai Stock Connect would start next week that will allow retail investors around the world to invest in mainland Chinese equities. In Japan stocks rallied on Tuesday as investor optimism was boosted by tumbling yen and an unexpected surge in current account surplus in September. The Nikkei Average jumped 2.1%, recovering from Monday’s loss of 0.6%. Meanwhile, the yen dropped sharply versus the dollar, trading at ¥115.86, compared with ¥114.94 a day earlier. Official data showed Tuesday that Japan’s current account surplus reached ¥963 billion ($8.1 billion) in September, up 61.9% from a year ago. And a newspaper reported today that Japanese Prime Minister Shinzo Abe will postpone a planned tax increase and call a general election for December, boosting stocks further.
Brent crude fell for a third day and West Texas Intermediate dropped in New York. Brent for December settlement closed at $81.67 yesterday, the lowest price since October 2010. Amid signs that supply is outpacing global demand OPEC members are cutting export prices to the US to defend their market share. Yesterday Angola’s Deputy Oil Minister Anibal Octavio da Silva said OPEC is undecided on a production cut. Saudi Arabia, OPEC’s largest producer, and Kuwait have signaled they’re unlikely to reduce output, while Libya, Venezuela and Ecuador have called for action to keep prices from falling further.
Gold posted a marginal gain on Tuesday in a session that started with losses. Gold for December delivery added $3.20, or 0.3%, to $1,163 an ounce on the Comex division of the New York Mercantile Exchange. Holdings in the SPDR Gold Trust shrank for a sixth day to a six-year low yesterday in the longest slump since November 2013. Gold will be under pressure as long as stronger US dollar and improving US economy decrease the demand for safe haven asset. Elsewhere in the metals sector, January platinum lost 20 cents to settle at $1,206.70 an ounce while December palladium rose $6.45, or 0.8%, to settle at $772.70 an ounce. Meanwhile, December silver settled up less than a penny at just under $15.68 an ounce.