US stocks closed much higher on Thursday on rebounding oil prices that relieved concerns over the possible banks’ debt defaults. S&P 500 index closed 1.13% higher at 1,951.7, with all its sectors closing in the black, and financials, industrials and basic materials being the leaders of growth, having added 1.2-1.3% each. For the last 9 trading days the broad market index has already edged up by 6%, and for the first time in 2016 it surpassed its 50-day moving average.
Dow Jones industrial average added 1.29% to 16,697.29. Nasdaq 100 composite rose 0.87% to 4,582.21, mainly due to Microsoft (O:MSFT) shares growth of 1.44%. Durable goods orders for January came out being much better than expected on stronger demand, which gave hope that the manufacturing sector may improve. On the other hand, the initial jobless claims and the housing price index were worse than expected.
Trading was thin, as only 7.3bn shares changed hands on US exchanges, while the 20 trading days’ average is 9bn a day.
Today at 14:30 CET the annualized preliminary GDP for Q4 will be released in the US. It is expected to fall from 0.7% to 0.4%. At the same time, the goods trade balance for January and the preliminary core personal consumption expenditures for Q4 will come out. At 16:00 CET the personal spending for January will be released. The tentative outlook is for this is positive. At 19:00 CET the Baker Hughes US oil rig count is expected.
European stocks were on the rise on Thursday on positive corporate earnings reports. The British bank Lloyds (L:LLOY) shares rallied 13.5% on the news of higher corporate profits and special dividend payment. Deutsche Telecom edged up 2.1% on positive performance in the domestic market in Q4 2015. The pan-European FTSEurofirst index rose 2% to 1,284.58, still losing 10% since the start of the year.
Today, on Friday, the European markets are on the rise, being close to their three-week high. Mining stocks record gains with Glencore (L:GLEN), BHP Billiton (L:BLT) and Rio Tinto (L:RIO) up from 4.1 to 6.2% each. Investors are anticipating the G20 two-day meeting due on Feb 26-27.
Japan’s Nikkei index rallied to a 2-1/2 week high early on Friday morning thanks to US stocks growth and yen weakening. It rose 0.6% to 16,241.89. The index has already gained 2.7% this week and 10% from the lowest level since October 2014 hit earlier this month. Nevertheless, people remain concerned with the global economic slowdown and low commodity prices.
On February 26 the two-day G20 meeting opens, in which finance ministers and central bankers are expected to take some steps towards easing the investors’ concerns over the recent market turmoil.
The USD/JPY rate edged up to 113 yen, which supported the exporter shares. Honda Motor (T:7267) stocks and Panasonic Corp. (T:6752). stocks increased 2.0% each. Tokyo Electron (T:8035) rose 2.2%. Sharp (T:6753) shares slumped 15% on the news Foxconn postponed signing the company’s takeover deal.
Oil futures prices are paring early losses on Friday with Brent crude futures traded at $36.09 a barrel, up from the yesterday’s intraday low of $34.73. The WTI oil futures are also on the rise, traded at $33.82.
Gold rose 0.85% on Thursday to $1,240 an ounce, on potential for “golden cross” technical pattern to form and being pushed up by the stock market rally. Investors still regard gold as a safe-haven asset given the recent global stock markets' turmoil and low oil prices. The assets of gold-backed ETFs were on the rise as well which gave additional support to gold prices. Today spot gold is 0.2% down at $1,231.90 an ounce, while the futures for April delivery lost 0.5% to $1,232.50 an ounce.