US stocks ended lower last week. The US dollar strengthened after Federal Reserve Chair Janet Yellen stated on Thursday the central bank would likely raise interest rates this year. The ICE US Dollar index, a measure of the dollar’s strength against a basket of six major currencies, ended the week 1.1% higher. S&P 500 closed down slightly on Friday as a selloff in biotechnology stocks reversed early session gains spurred by Fed Chair’s bullish remarks. All three indexes recorded weekly losses, the S&P 500 retreating 1.4%, the Dow Jones closing down 0.4%, and the Nasdaq falling 2.9%. Nike (NYSE:NKE) rallied 8.9% on better than expected earnings report, helping Dow edge up 0.7% on Friday. Data on Friday appeared to support Fed Chair’s assessment that the US economy was strong enough to withstand an interest rate hike this year. Revised GDP report showed US economy grew in the second quarter at a higher annual pace than previously estimated – 3.9% instead of 3.7%. Also University of Michigan consumer sentiment for September was revised upward from 85.7 to 87.22, reducing the fall in consumer confidence from August. US stock index futures are falling now. Today at 14:30 CET Federal Reserve Bank of New York President Dudley will speak on inflation. At 14:30 CET August personal consumption expenditure price index, personal income and spending will be released. The tentative outlook is neutral. At 16:00 CET August Pending Home Sales will be released. The tentative outlook is positive. At 19:30 CET Federal Reserve Bank of Chicago President Charles Evans will give a speech on monetary policy in Milwaukee, at 23:00 CET Federal Reserve Bank of San Francisco President John Williams will speak on economic outlook in San Francisco.
European stocks rallied on Friday as investor confidence was buoyed by Federal Reserve Chair Yellen’s comments on strength of US economy and global economic conditions. Janet Yellen’s said on Thursday growth internationally wasn’t weak enough to have a long-term impact on US monetary policy and policy makers expect a rate hike later this year, followed by a gradual pace of tightening thereafter. The STOXX 600 jumped 2.8%, however recording a weekly loss of 1.6%. Volkswagen (XETRA:VOWG) shares closed down 4.3% on Friday, recording a weekly plunge of 33.9% after US regulators accused the company last week of using software to cheat pollution-control standards. BMW (XETRA:BMWG) gained 4.2% after German magazine Auto Bild late Thursday said it had no evidence of exhaust manipulation by the auto maker following earlier report a street emission test of one of the company’s car models was much higher than allowed in Europe. No important economic data are expected today in euro-zone.
Nikkei 225 fell 1.3% today as investors booked profits after Friday’s 1.8% gain. Yen strengthened against the dollar. Credit Suisse (SIX:CSGN) reduced the size of its overweight rating of Japanese equities, citing exposure to global emerging markets.
Oil is falling today on slowing global economic growth outlook. Market participants are concerned growth in Asia will slow down further after a report today showed industrial companies’ profits in China dropped 8.8% in August from the same month last year, the most in at least four years. Prices continue falling despite Baker Hughes (NYSE:BHI) report that the number of active US oil-drilling rigs fell by 4 to 640 last week, fourth straight weekly decline.