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Rebounding Oil And Positive Reports Boost Global Equities

Published 05/11/2016, 09:35 AM
Updated 12/18/2019, 06:45 AM


US stocks rallied on Tuesday as oil rebounded. The dollar strengthened for the sixth straight day: the live dollar index data indicate the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, rose 0.2% to 94.236. The Dow Jones Industrial Average jumped 1.3% settling at 17928.35. Caterpillar (NYSE:CAT) and United Technologies (NYSE:UTX) gained more than 2% recovering most of previous day’s losses and pushing the blue chip index higher. The S&P 500 closed 1.3% higher at 2084.39 with all ten main sectors ending in positive territory led by gains in energy, materials and industrial sectors. A 3.5% gain in Amazon (NASDAQ:AMZN) shares helped boost the broad stock market index after analysts at Bernstein said the stock could rise as much as 50% within the next year. Both the S&P 500 and Dow Jones 30 logged their best gains in two months. The Nasdaq Composite also added 1.3%. In economic news the number of open jobs rose in March according to Job Openings and Labor Turnover Survey results. Wholesale inventories rose 0.1% in March in line with expectations and the National Federation of Independent Business reported its Small Business Optimism index rose in April after declining for three straight months. Today at 13:00 CET Mortgage applications will be released by the Mortgage Bankers’ Associations in US. And at 20:00 CET the Budget Statement for April will be released.


European stocks rose on Tuesday on positive earnings reports and news euro-zone finance ministers offered to grant Greece some debt relief in return for pension reforms and tax hikes. The euro weakened after a report German industrial production dropped 1.3% in March instead of a 0.2% expected decline. The Stoxx Europe 600 gained 0.9%. Energy stocks advanced with higher oil prices: Norwegian energy services provider Subsea 7 shares rose 2%, Spanish oil producer Repsol (MC:REP) added 1.9%. Credit Suisse (SIX:CSGN) shares rallied 5% on smaller-than-expected loss of 302 million Swiss francs ($311 million). Germany’s DAX 30 index rose 0.7% to 10045.44 helped by 4% gain in Volkswagen (DE:VOWG_p) on news the auto maker is close to an agreement about fixing thousands of diesel-powered vehicles in the US which had been equipped with emission test-cheating software. France’s CAC 40 index added 0.4% despite a report French industrial production unexpectedly fell 0.3% in March instead of an expected rebound after a sharp 1.3% contraction in February. Today at 10:30 CET March Manufacturing and Industrial Production will be released in UK. The tentative outlook is positive. At 16:00 CET the GDP growth in the three months ending in April will be published by the National Institute of Economic and Social Research in UK.


Nikkei advanced for a third straight session today gaining 0.1% even as yen strengthened against the dollar. Chinese shares are rising after earlier losses as investors worried about rising corporate debt levels, Shanghai Composite Index is up 0.18%.


Oil futures prices are falling today as Canadian producers are expected to ramp up crude oil production after a week-long shutdown due to wildfires resulted in country’s output decline by about 1.5 million barrels a day. July Brent crude rose 4.3%, to $45.52 a barrel on London’s ICE Futures exchange on Tuesday on tighter cured supply expectations as wildfires disrupted production in Canada oil sands and escalation of hostilities in Nigeria resulted in lower crude output due to pipeline disruptions. Investors are waiting today for the release of US Crude Oil Inventories by the Energy Information Administration at 16:30 CET. US crude stockpiles are expected to rise after the American Petroleum Institute industry group reported late Tuesday that US crude inventories rose by 3.45 million barrels to a 543.1 million barrels last week.


Gold is rebounding from two week low today following the retracement last week after breaching the $1,300 resistance level. June gold is up more than 1% after closing at $1258.3 an ounce on Comex on Tuesday, its weakest since April 28.

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