Dollar weakening slows
US stocks rally continued on Monday as China deal optimism and positive earnings reports supported risk appetite. The S&P 500 finished 0.4% higher at new record high 3078.27. Dow Jones industrial added 0.4% to 27462.11. The Nasdaq composite rose 0.6% to 8432.20. The dollar weakening halted as Federal Reserve Minneapolis Fed President Neel Kashkari said the central bank may not cut rates further as long as US economy growth remained robust: 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 0.4% to 97.56 but is lower currently. Futures on US stock indices point to higher openings.
Better than expected quarterly reports underpin investment sentiment. Of the 356 companies in the S&P 500 that have reported third quarter earnings so far, 75.8% have reported earnings per share that exceeded forecasts, according to data from Refinitiv. This share of companies with results beating forecasts exceeded the above-average 65% beat rate since 1994. The results so far, if projected on remaining companies, point to the pace for an overall decline in SP500 earnings of 0.8%, up from a predicted 2.2% contraction on October 1.
DAX posts biggest gain among European indexes
European stock market notched back to back gains on Monday with global growth slowing concerns receding. Both EUR/USD and GBP/USD turned lower yesterday with euro higher against the dollar while Pound retreating currently. The Stoxx Europe 600 index ended 1.0% higher Monday as manufacturing data out of Spain, Italy, France, Germany came marginally better than expected. The DAX 30 rallied 1.4% to 13136.28. France’s CAC 40 rose 1.1% and UK’s FTSE 100 gained 0.9% to 7369.69.
Nikkei rally leads Asian indexes gains
Asian stock indices are extending gains today after Monday reports the US was considering rolling back tariffs on $112 billion in Chinese goods as a concession to reach a phase one deal. Nikkei rallied 1.8% to 23251.99 with yen slide against the dollar intact as the Bank of Japan reduced its purchase of bonds with 10 to 25 years to maturity to 100 billion yen ($920 million), from 120 billion yen previously. Markets in China are rising despite report China’s Caixin services PMI slowed to 8-month low. The Shanghai Composite Index is up 0.5% and Hong Kong’s Hang Seng Index is 0.4% higher. Australia’s All Ordinaries Index extended gains 0.2% despite Australian dollar’s resumed climb against the greenback following Australia’s central bank decision to leave interest rates unchanged.
Brent futures prices are marginally lower today. Prices rose yesterday as Saudi Arabia formally began an initial public offering on Sunday of a portion of Saudi Aramco: January Brent crude closed 0.7% higher at $62.13 a barrel on Monday.