| | The major U.S. index futures are pointing to a modestly lower opening on Thursday, with stocks likely to give back ground following the rally seen in the previous session.
Traders may look to cash in on yesterday?s substantial gains, which came on the heels of ?dovish? comments from Federal Reserve Chairman Jerome Powell.
Lingering uncertainty about trade between the U.S. and China may weigh on the markets ahead of this weekend?s meeting between President Donald Trump and Chinese President Xi Jinping.
Trump and Xi are due to hold a dinner meeting on Saturday on the sidelines of the G20 summit in Buenos Aires, Argentina, although a substantive breakthrough is seen as unlikely.
After moving moderately higher early in the session, stocks saw further upside over the course of the trading day on Wednesday. The major averages climbed firmly into positive territory, further offsetting the weakness seen last week.
The major averages ended the session at their best levels of the day. The Dow surged up 617.70 points or 2.5 percent to 25,366.43, the Nasdaq spiked 208.89 points or 3 percent to 7,291.59 and the S&P 500 soared 61.61 points or 2.3 percent to 2,743.78.
The rally on Wall Street came on the heels of Federal Reserve Chairman Jerome Powell's remarks in a speech to the Economic Club of New York that were interpreted as dovish for interest rates.
Powell noted interest rates are still low by historical standards and said rates are currently "just below the broad range of estimates of the level that would be neutral for the economy."
The latest remarks seem to conflict with comments Powell made early last month, when he described rates as a "long way from neutral."
Powell also said the economy is close to achieving both of the Fed's objectives of promoting maximum employment and price stability.
The Fed Chief stressed rates are not on a "preset" path and said the central bank will pay very close attention to incoming data.
"As always, our decisions on monetary policy will be designed to keep the economy on track in light of the changing outlook for jobs and inflation," Powell said.
Ahead of Powell's remarks, Trump attacked the Fed Chairman in an interview with the Washington Post published late Tuesday.
Trump told the Washington Post he is "not even a little bit happy" with Powell, blaming the Fed for recent stock market weakness and General Motors' (GM) announcement of plant closures and layoffs.
"I'm doing deals, and I'm not being accommodated by the Fed," Trump said. "They're making a mistake because I have a gut, and my gut tells me more sometimes than anybody else's brain can ever tell me."
"So far, I'm not even a little bit happy with my selection of Jay. Not even a little bit," he added. "I think that the Fed is way off-base with what they're doing."
CME Group's FedWatch tool currently indicates an 82.7 percent chance the Fed will raise rates by another quarter point to a range of 2.25 to 2.50 percent at its monetary policy meeting next month.
Meanwhile, traders largely shrugged off a report from the Commerce Department showing a substantial decrease in new home sales in the month of November.
The Commerce Department said new home sales plummeted by 8.9 percent to an annual rate of 533,000 in October from an upwardly revised rate of 597,000 in September.
Economists had expected new home sales to rise to a rate of 575,000 from the 553,000 originally reported for the previous month.
With the steep drop, new home sales tumbled to their lowest level since hitting an annual rate of 538,000 in March of 2016.
Software stocks moved sharply higher over the course of the session, driving the Dow Jones Software Index up by 4.3 percent. The index continued to recover after hitting its lowest closing level in nearly five months last Tuesday.
Within the software sector, salesforce.com (CRM) posted a standout gain after the customer-management software developer reported better than expected fiscal third quarter results and raised its full-year revenue guidance.
Substantial strength also emerged among retail stocks, which have recently benefited from reports of strong Black Friday sales. Reflecting the strength in the retail sector, the Dow Jones Retail Index soared by 3.8 percent.
Gold stocks also turned in a particularly strong performance, resulting in a 2.9 percent jump by the NYSE Arca Gold Bugs Index. The strength among gold stocks came amid a notable increase by the price of the precious metal.
Biotechnology, steel, computer hardware, and transportation stocks also moved notably higher on the day amid broad based buying interest on Wall Street.
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After reporting an unexpected uptick in first-time claims for U.S. unemployment benefits in the previous week, the Labor Department released a report showing another unexpected increase in initial jobless claims in the week ended November 24th.
The report said initial jobless claims climbed to 234,000, an increase of 10,000 from the previous week?s unrevised level of 224,000. Economists had expected jobless claims to edge down to 220,000.
Meanwhile, a separate report from the Commerce Department showed personal income and spending both increased by more than anticipated in the month of October.
The Commerce Department said personal income climbed by 0.5 percent in October after edging up by 0.2 percent in September. Economists had expected income to rise by 0.4 percent.
Additionally, the report said personal spending advanced by 0.6 percent in October after rising by 0.2 percent in the previous month. Spending had also been expected to increase by 0.4 percent.
At 10 am ET, the National Association of Realtors is scheduled to release its report on pending home sales in the month of October. Pending home sales are expected to climb by 0.5 percent in October, matching the increase seen in September.
A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
A 2 pm ET, the Federal Reserve is due to release the minutes of its monetary policy meeting held earlier this month. The Fed decided to leave interest rates unchanged at the meeting.
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Shares of Dollar Tree (DLTR) are seeing significant pre-market weakness after the discount retailer reported weaker than expected fiscal third quarter revenues and lowered its guidance for the current quarter.
Lab testing services provided Quest Diagnostics (DGX) may also come under pressure after lowering its full-year earnings and revenue forecast.
Shares of Guess (GES) are also likely to move to the downside after the apparel retailer reported fiscal third quarter earnings that missed estimates and provided disappointing current quarter guidance.
On the other hand, shares of Abercrombie & Fitch (ANF) may see initial strength after the apparel retailer reported fiscal third quarter results that exceeded expectations on both the top and bottom lines.
Cloud storage company Box (BOX) is also likely to move to the upside after reporting a narrower than expected fiscal third quarter loss and providing upbeat full-year guidance.
Shares of McDonald?s (MCD) may also open higher after Morgan Stanley upgraded its rating on the fast food giant to Overweight from Equalweight. | | | | | Become a Shareholder in High Times The Original Voice of Cannabis. Join our investor community and help shape the emerging cannabis industry.
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European stocks have followed their U.S. peers higher on Thursday after Federal Reserve Chairman Jerome Powell said U.S. interest rates are just below neutral, implying that the Fed's three-year tightening cycle is drawing to a close.
Investors also remained hopeful for a de-escalation in trade tensions between the U.S. and China at the G20 summit, though a substantive breakthrough is unlikely.
While the German DAX Index has inched up by 0.1 percent, the French CAC 40 Index is up by 0.4 percent and the U.K.?s FTSE 100 Index is up by 0.6 percent.
Higher iron ore and copper prices have helped lift miners, with Anglo American, Antofagasta, Rio Tinto and Glencore all rising.
Ericsson has advanced after being selected by Volvo Car Group to provide the CVC platform to further enable its digital vehicle services in more than 120 markets worldwide for the next five years.
Automakers Daimler, Volkswagen, Renault and Peugeot have also moved to the upside despite President Donald Trump renewing threats to impose tariffs on imported cars.
Meanwhile, British media company Daily Mail & General has slumped after it warned of volatile advertising market conditions.
Intu properties has also fallen sharply in London after a consortium consisting of the Peel Group, the Olayan Group and Brookfield Property Group announced its withdrawal from a possible offer for the company.
Banks are subdued after the EU Commission said a reduction in Italy's planned public deficit is not sufficient for the country to escape EU sanctions.
In economic news, data from the Federal Statistical Office showed Germany's employment level in October hit a record high since reunification, while the ILO jobless rate eased from the previous month.
Employment grew by 1.2 percent or 556,000 persons year-on-year to over 45.1 million. The adjusted ILO jobless rate eased to 3.3 percent from 3.4 percent.
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Asian stocks rose broadly on Thursday, though markets in China and Hong Kong ended in the red amid anxiety ahead of crucial meeting between President Donald Trump and Chinese President Xi Jinping on the sidelines of the G20 summit later this week.
While a substantive breakthrough is unlikely, the two sides may agree on a communiqué for a de-escalation of trade tensions.
Underlying sentiment remained supported across the region after Federal Reserve Chairman Jerome Powell said current interest rates are ?just below? neutral.
Chinese stocks fluctuated before closing sharply lower ahead of the much-anticipated meeting between the U.S. and Chinese presidents this weekend.
The benchmark Shanghai Composite Index tumbled 34.29 points or 1.3 percent to 2,567.44, while Hong Kong's Hang Seng Index dropped 231.53 points or 0.9 percent to 26,451.03.
Japanese shares advanced despite the dollar weakening against the yen on expectations of a slowdown in the pace of rate hikes by the Fed. The Nikkei 225 Index rose 85.58 points or 0.4 percent to 22,262.60, while the broader Topix Index closed 0.4 percent higher at 1,659.47.
Consumer electronics and video game company Nintendo soared 4.1 percent after its Switch console set two new records from Thanksgiving to Cyber Monday. Nissan Motor rose 1.4 percent to snap a two-day losing streak.
In economic news, retail sales in Japan surged up a seasonally adjusted 1.2 percent in October, a government report showed. That exceeded expectations for an increase of 0.4 percent following the 0.2 percent decline in September.
Australian markets pared some gains after hitting a more than two-week high earlier in the day. The benchmark S&P/ASX 200 Index still closed up 33.30 points or 0.6 percent at 5,758.40 amid broad-based buying. The broader All Ordinaries Index climbed 35.60 points or 0.6 percent to 5,835.70.
Higher iron ore and copper prices helped lift miners. BHP Billiton gained 1.2 percent as its Spence copper mine resumed operations after a union strike. Rio Tinto advanced 1.7 percent after approving a $2.6 billion investment in its Koodaideri iron ore mine in Western Australia.
Financials followed their U.S. peers higher, with banks ANZ, Commonwealth and Westpac rising between half a percent and 0.7 percent.
On the other hand, waste management company Bingo Industries slumped 5.3 percent after the competition regulator criticized its proposed merger with rival Dial A Dump.
Energy stocks ended mixed despite oil prices falling more than 2 percent overnight. Poker machine maker Aristocrat Leisure declined 2.6 percent after reporting its full-year results.
In economic news, total new capital spending in Australia fell a seasonally adjusted 0.5 percent sequentially in the third quarter of 2018, official data showed, missing forecasts for an increase of 1.0 percent.
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Crude oil futures are jumping $1.01 to $51.30 a barrel after tumbling $1.27 to $50.29 a barrel on Wednesday. Meanwhile, an ounce of gold is trading at $1,226, up $2.40 compared to the previous session?s close of $1,223.60. On Wednesday, gold jumped $10.20.
On the currency front, the U.S. dollar is trading at 113.30 yen compared to the 113.68 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1382 compared to yesterday?s $1.1366.
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For tickets and a 30% discount Click Here Or use discount code ADVFN on https://mjac.io/ Hope to see you this Friday. | | | London open: Stocks rise as Powell strikes dovish note; Intu deal collapses | | | | | London stocks rose in early trade Thursday, taking their cue from big gains on Wall Street after Federal Reserve Chairman Jerome Powell struck a more dovish tone in his latest speech. At 0830 GMT, the FTSE 100 was up 0.5% to 7,037.59, while the pound was flat against the dollar at 1.2827 and 0.2% lower versus the euro at 1.1260. The Dow surged more than 600 points on Wednesday after Powell said US interest rates were "just below" neutral levels barely two months after saying they were "a long way" from neutral, leading US equity markets to their best session since March. Neil Wilson, chief market analyst at Markets.com, said: "Powell’s statement on the neutral rate was taken as a dovish assertion by markets and in many ways you could say the Fed chair just turned Santa for equity investors. "If a December pop for equities, or Santa Rally, were going to occur then a more easy Fed will do it. The softer language from the Fed will be heard loud and clear by equity markets as a sign it's aware of the risks of tightening too quickly. Trade will continue to act as an anchor on bullishness ahead of the G20 meeting - but in many ways the more trade and tariffs weigh on growth the looser the Fed will remain. In some ways we are back to the bad-news-is-good-news play for equities." There was also some good news for UK banks as the Bank of England stress tests, released after the previous day's close, revealed that they are strong enough to survive a disorderly Brexit, the outcome of which the BoE said could leave the country worse off than in the 2008 financial crisis. None of the high street lenders were told to raise billions of pounds in capital to strengthen their finances. Miners were the standout gainers as copper prices edged up, with Glencore, Antofagasta and Rio Tinto all firmer. Rio was also in focus after giving the green light for its $2.6bn (£2.03bn) Koodaideri iron ore mine in Western Australia. Unilever ticked up as it said chief executive Paul Polman will step down from the role at the end of next month and be replaced by the group's beauty & personal care boss, Alan Jope. Britvic fizzed higher as the drinks maker posted a rise in full-year profit and revenue despite a "challenging" environment, as its move towards lower sugar drinks paid off. Car auctioneer BCA Marketplace was in the green as it reported a jump in interim pre-tax profit and revenue on the back of higher volumes and higher average vehicle prices, while Greene King racked up solid gains as the pub operator posted a 3.2% increase in first-half pre-tax profit. Tullow Oil rose after saying it will go back to paying dividends, which were suspended in 2015, following "excellent" operational and financial progress over the past 18 months. Train and bus operator Go-Ahead advanced as management signalled better revenues since the start of the financial year. Ashtead was on the front foot as it promoted the boss of its US business to the role of chief executive as Geoff Drabble steps down after 12 years in charge. On the downside, Intu Properties tumbled more than 36% after a consortium led by its deputy chairman John Whittaker pulled its takeover offer for the shopping centre owner citing economic uncertainties. Broker Liberum said: "Their decision to walk away leaves Intu in a challenging position with its highly valued shopping centres facing cyclical and structural pressure, above average financial leverage, a departing CEO, and two recently failed bid processes which will have inevitably been disruptive to the business." Thomas Cook - which issued a profit warning earlier in the week - fell as the tour operator confirmed it swung to a full-year loss despite rising sales. In broker note action, British American Tobacco was upgraded to 'sector perform' at RBC Capital Markets, while Cobham was lifted to 'buy' at Berenberg. Senior was hit by a downgrade to 'neutral' at JPMorgan. International Consolidated Airlines, Johnson Matthey, Land Securities, Severn Trent, Bellway, Caledonia Investments, Diploma, Electrocomponents, Euromoney Institutional Investor, Hill & Smith, JD Sports, Renewi, TalkTalk and Telecom Plus were among the companies whose stock went ex-dividend. | | | | | How I came to understand Price Action – Stratton Markets Webinar December 4th, 18.00 GMT Join now, as James is ready to share his experience with Price Action Trading, in his latest webinar. BOOK NOW Between 74-89% of CFD
traders lose | | | US close: Stocks record strong gains following dovish tone from Powell | | | | | Wall Street stocks closed considerably higher on Wednesday as hopes that China and the US would be able to reach a truce on trade at this week's G20 meeting were renewed and a dovish tone by Fed chairman Jerome Powell sent the Dow 600 points higher in late trading. At the close, the Dow Jones was up 2.50% at 25,366.43, while the S&P 500 gained 2.30% to 2,743.78 and the Nasdaq was 2.95% firmer at 7,291.59. US stocks recorded their third consecutive day of gains, as investors interpreted Powell's comments surrounding interest rates as being dovish. Interest rates in the US are "just below" neutral, the President of the US Federal Reserve said. Speaking at the Economic Club of New York, Jerome Powell said interest rates remained low by historical comparisons "and they remain just below the broad range of estimates of the level that would be neutral for the economy--that is, neither speeding up nor slowing down growth." Powell appeared to a tow line that was slightly more dovish than that taken by his number two, Fed vice chairman Richard Clarida, just the day before and also appeared to emphasise 'data dependency', meaning that rate-setters would be watching incoming even more closely. Philip Marey, senior US strategist at Rabobank noted: "If we read his words carefully there is actually less of a dovish shift than one would perceive at first sight." However, in a research note sent to clients, Marey went on to say: "Our baseline scenario is that the yield curve inverts after the March hike and this will induce the Fed to take a pause. In their mind, an inversion would indicate that monetary policy is restrictive, and not that a recession is imminent as history teaches us." "So we are likely to see history repeating itself with the Fed stopping the hiking cycle too late, inverting the yield curve, and causing -or at least contributing to- a recession." Elsewhere, White House economic advisor Larry Kudlow, who revealed on Tuesday that US officials were having "a lot of communication" with the Chinese government at all levels ahead of the G20 meeting in Argentina this week, said Donald Trump had told advisers that "in his view, there is a good possibility that a deal can be made and that he is open to that". However, China would need to do more for an agreement to be reached, with certain conditions needing to be met, Kudlow said. Analyst Michael Hewson at CMC Markets said: "This would suggest that for all the optimism and Trump’s comments earlier this week that the best we can hope for is that any additional tariffs are delayed, and the current ones are left at their current levels." "Nonetheless equity markets have chosen to focus on the positive with Asia markets also pushing higher ahead of the key meeting on Saturday with Presidents Trump and Xi." At 2135 GMT, the USD was 0.64% softer against the GBP at 0.7796, while Brent was 2.67% lower at $58.60 per barrel and West Texas Intermediate was 2.62% weaker at $50.21 a barrel. Also on oil, US crude oil stockpiles jumped last week, easily surpassing analysts' forecasts. Over the seven days ending on 23 November, commercial crude oil inventories in the States grew by 3.6m barrels from the week before (consensus: 769,000 barrels), to reach 450.5m barrels, the Energy Information Administration said, and were about 7% above their five-year average. In parallel, gasoline inventories slipped by 800,000 barrels to stand roughly 5% above their five-year average while those of distillates rose by 2.6m barrels. In corporate news, Tiffany's slumped 11.82% during the day after the luxury jeweller's third-quarter sales missed analysts' expectations. Consumer foods group JM Smucker had slipped 7.24% at the close after its quarterly profit and sales missed forecasts and the company cut its full-year outlook. On the other hand, Burlington Stores shot up 12.76% as its third-quarter earnings and revenue topped analysts' forecasts, while Salesforce.com rallied 10.25% after posting better-than-expected third-quarter results late on Tuesday. Boeing closed 4.88% higher, leading the Dow's gainers, and Apple closed 0.10% higher - holding on to its title of the most valuable company in the US after Microsoft took the title earlier in the day for the first time in eight years. On the data front, America's shortfall on trade in goods with the rest of the world widened last month as export growth slipped. The US deficit on its foreign trade in goods increased by 1.3% month-on-month in October to reach $77.2bn, according to the Department of Commerce. Exports shrank by 0.5% versus the previous month to reach $140.5bn while imports were little changed, edging up by just $200m to $217.8bn. Economists had pencilled-in a deficit of $77bn. In other news from the Department of Commerce, America's economy slowed a tad more quickly than expected last quarter but in a potentially positive development, data on businesses' outlays on equipment was revised sharply higher. America's gross domestic product expanded at a quarterly annualised pace of 3.5% over the three months to September, which was unchanged from the preliminary estimate, although a tenth of a percentage point lower than economists had forecast. However, the underlying details were "favourable", said Ian Shepherdson at Pantheon Macroeconomics, pointing to upwardly revised growth of 3.5% in business fixed investment. Elsewhere, sales of new US single-family homes tumbled in October, according to data from the Commerce Department. New home sales declined by 8.9% to a seasonally adjusted annual rate of 544,000, below expectations for a level of 575,000 and compared to a revised level of 597,000 in September. Sales were down 12% from October 2017's level of 618,000. Meanwhile, the median price of a new home was $309,700 last month compared to $321,300 in September. The Richmond Fed manufacturing index revealed the service sector "grew slightly in November". However, the survey's results were a bit weaker than expected. The index came in at 14, just shy of the 15 expected by economists and lower than the prior month at 15. | | | | | Are you looking for a profitable trading strategy? Do you have 20 minutes a day to follow this strategy? Yes! Then you need to watch this session. In fact for the past 6 months this strategy has been averaging +1275 pips per month! Book A Free Place To Find Out More | | | Thursday newspaper round-up: UK banks, outsourcers, Microsoft, debt | | | | | UK banks are strong enough to survive a disorderly Brexit that could leave the country worse off than the 2008 financial crisis, according to the Bank of England. For a second straight year, none of the high street lenders have been told to raise billions of pounds in capital to strengthen their finances, under the Bank’s latest financial sector health check. – Guardian John McDonnell has said Labour will “inevitably” back a second referendum if the party is unable to force a general election, in comments widely regarded as marking a shift in Labour’s position. The shadow chancellor repeated that a general election remained a preference but admitted it was “very difficult to do” because of the Fixed-term Parliaments Act.- Guardian Public sector outsourcers who take months to pay their own suppliers face being blocked from bidding for new contracts under new Government plans to crack down on late payments. From next autumn procurement bosses will be expected to assess whether or not suppliers on contracts worth more than £5m per year have “robust measures” to ensure subcontractors are paid on time and are settling 95pc of their invoices within 60 days of receipt. - Telegraph Microsoft has overtaken Apple as the world’s most valuable publicly-listed company, 16 years after the software giant lost its crown in the wake of the dotcom crash. On Wednesday, Microsoft’s market value reached $850bn (£664bn), seeing it surpass its old rival for the first time since 2010 following a prolonged decline in Apple’s share price. - Telegraph Households are still sitting on historically large piles of debt, the Bank of England has warned. Although people’s debt is lower than it was during the financial crisis a decade ago, falling from 144 per cent of incomes to 125 per cent today, the central bank said that consumers could stop spending abruptly if they came under more financial strain. This, in turn, would amplify an economic downturn. - The Times Britain will not replicate all the European Union’s trade deals in time for a no-deal Brexit next March, the trade minister has said. George Hollingbery told MPs that UK officials would “roll over” the majority of the bloc’s 40 or so trade agreements with about 70 countries before leaving. - The Times | |
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