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On 13 June 2019 - US stocks edge up as tech recovers, energy shares rise with oil prices

Anne D Picker

Anne D Picker - Econoday

Oil gains on tanker incident in Gulf of Oman.

US markets

US equities rose slightly Thursday, with tech shares, especially chipmakers, bouncing back from losses on Wednesday, and energy shares rising in response to a spike in oil prices.  Oil rose on news of attacks on two oil tankers near Iran in the Gulf of Oman.

The market faced crosscurrents, as uncertainty over US-China trade was offset by expectations for Fed rate cuts. Fed easing hopes have been reinforced by soft inflation readings, including US import-export price data Thursday. Worries about fallout from the Gulf tanker incident eroded the market’s gains late in the day.

The Dow industrials rose 0.4 percent; the S&P 500 rose 0.4 percent, and the NASDAQ rose 0.6 percent.

Disney (up 3.9 percent) led the gainers after Morgan Stanley recommended its shares in light of the company’s new streaming service. Uber (up 4.3 percent) and Lyft (up 4.5 percent) also rose after positive analyst comments.

Chipmakers including Micron Technology (up 1.1 percent) were notable gainers after leading the declines on Wednesday, but the uptick faded late Thursday.

Big oil rose on the spike in oil prices, with Hess up 2.5 percent, Exxon Mobil up 0.6 percent, and Conoco Phillips up 0.7 percent.

Economic data showed US import prices were weak in May, falling 0.3 percent on the month which was expected and 1.5 percent on the year which was 2 tenths deeper than Econoday's consensus. Export prices were even weaker than expectations, at minus 0.2 percent vs Econoday's consensus for a 0.1 percent gain.

US jobless claims edged up 3,000 in the June 8 week but at 222,000 remain near historic lows. The 4-week average of 217,750 is slightly under the reading in early May which offers an early hint of steady conditions for the June employment report.

These data reflect observations at 4:00 PM US ET: Dated Brent spot crude was up US$1.55 at US$61.33 while gold was up US$7.75 at $1,341.30. The US dollar was higher against most major currencies. The yield on the US Treasury 30-year bond was down 1 basis point at 2.61 percent while the yield on the 10-year note was down 2 basis points at 2.19 percent.

European markets

European shares edged up Thursday, with energy and mining shares tracking oil prices slightly higher, and telecom shares getting a lift from the results of the German auction of 5G mobile spectrum.

Shares were lower initially on negative sentiment linked to the US-China trade dispute, and the afternoon recovery was limited by geo-political worries linked to the attacks on two oil tankers in the Gulf of Oman.

The European STOXX 600 rose 0.2 percent, the German DAX was up 0.4 percent,  and the French CAC and the UK FTSE 100 were both up a marginal 0.01 percent.  Italy’s FTSE-MIB rose 0.8 percent.

Royal Dutch Shell ended up 0.3 percent after being up 1 percent earlier. Plumbing products distributor Ferguson rallied 6.5 percent on news investor Nelson Peltz had taken a stake in the company.

Deutsche Telekom rose 1 percent after the 5G auction results. Other notable telecom gainers included Drillisch, up 2.6 percent, and United Internet, up 5.9 percent.

In economic news, there were no surprises in the Swiss National Bank's June announcement as the key deposit rate was held, as expected, at minus 0.75 percent. Crucially for the currency markets, the central bank also retained its assessment that the Swiss franc is still ‘highly valued' and reiterated its willingness to intervene as and when necessary to prevent any unwanted appreciation.

In data: the Eurozone goods producing sector continued to struggle in April. Excluding construction, output was down a slightly steeper than expected 0.5 percent versus March when it declined a sharper revised 0.4 percent. Annual workday adjusted growth improved from minus 0.7 percent to minus 0.4 percent but only because of an even softer period a year ago.

Asia Pacific Markets

Asian markets were mixed and generally little changed Thursday, with Japanese shares recording the biggest moves. The Nikkei index fell 0.5 percent on the day while the Topix index closed down 0.8 percent, with chipmakers among the weaker performers. The Shanghai Composite index and Hong Kong’s Hang Seng index were both close to flat on the day, with the latter stabilizing after a sharp fall on Wednesday as political protests escalated. Australia’s All Ordinaries index was also little changed on the day, down 0.2 percent.

Australian labour market data were the main highlight of the regional data calendar Thursday. Employment rose by 42,300 in may, little changed from an increase of 43,100 in April, with the split between part-time and full-time employment also relatively steady. The unemployment rate was unchanged at 5.2 percent, while the participation rate rose slightly from 65.9 percent to 66.0 percent. This stability in labour market conditions will likely reinforce the view of officials at the Reserve Bank of Australia that the Australian economy can sustain a lower rate of unemployment without causing a spike in inflation.

Looking forward

Industrial production and retail sales, as well as fixed asset investment, will be posted in China while wholesale prices are scheduled for release in India. CPIs will be posted in both France and Italy, and merchandise trade for the Eurozone. The US will release industrial production and retail sales.

Global Stock Markets

 

Index

13 Jun 2019

Daily Change

% Change Daily

North America

 

 

 

 

United States

Dow

26106.77

101.94

0.4

 

NASDAQ

7837.13

44.41

0.6

 

S&P 500

2891.64

11.80

0.4

Canada

S&P/TSX Comp

16239.26

12.02

0.1

Europe

 

 

 

 

UK

FTSE 100

7368.57

0.95

0.0

France

CAC

5375.63

0.71

0.0

Germany

XETRA DAX

12169.05

53.37

0.4

Italy

MIB

20630.75

167.50

0.8

Spain

Ibex 35

9247.1

8.60

0.1

Sweden

OMX Stockholm 30

1598.12

4.52

0.3

Switzerland

SMI

9861.83

2.10

0.0

Asia/Pacific

 

 

 

 

Australia

All Ordinaries

6619.14

-9.73

-0.1

Japan

Nikkei 225

21032

-97.72

-0.5

 

Topix

1541.5

-12.72

-0.8

Hong Kong

Hang Seng

27294.71

-13.75

-0.1

S. Korea

Kospi

2103.15

-5.60

-0.3

Singapore

STI

3220.66

12.92

0.4

China

Shanghai Comp

2910.74

1.36

0.0

Taiwan

TAIEX

10561.01

-54.65

-0.5

India

Sensex 30

39741.36

-15.45

0.0

*Markets closed

 

 

 

Data Source — Haver Analytics

 

 

 

Note: all releases are listed in local time.

Important Information

Econoday Inc. is a US company that provides financial commentary and indicators to industry professionals. All information provided and views expressed are those of Econoday. Reference in this document to specific securities should not be construed as a recommendation to buy or sell these securities, but is included for the purposes of illustration only. Past performance is not a reliable indicator of future results. The value of investments can go down as well as up and investors may not get back the amount invested.