Despite a slight increase in initial jobless claims, strong US retail sales data strengthened the dollar index and gave even more reason to believe that the Federal Reserve will announce the start of QE program cuts at its meeting on September 22. The US stock market ended Thursday’s trading without a single dynamic. At the closing time of the stock exchange, the Dow Jones index decreased by 0.18%, the S&P 500 lost 0.15%, and the NASDAQ added 0.13%. The technological sector became the growth leader, while the negative dynamics were demonstrated by the oil, gas, and utility sectors.
European stock indices were up yesterday at the end of the day. British FTSE 100 and German DAX added 0.2% each, French CAC 40 increased by 0.6%, Spanish IBEX 35 and Italian FTSE MIB added 1.1% and 0.8% respectively. Yesterday, ECB head Christine Lagarde said that Europe is recovering faster than originally expected. But analysts are looking at the situation from a slightly different angle. Europe is already facing its worst natural gas crisis in decades, with prices climbing to record levels before winter. Goldman Sachs warned that skyrocketing commodity prices will put heavy industry across Europe at risk of power outages this winter, especially if frosts in Europe are delayed. Europe will report on inflation today. A surge in inflation may provoke the ECB to start cutting stimulus as soon as the next meeting.
Global GDP may grow by +5.3% in 2021 due to “radical” policy measures and successful vaccine introductions in advanced economies. But next year’s growth is likely to slow to +3.6%.
Precious metals prices have decreased. Gold fell by nearly 3% on Thursday, and silver lost 5% on the back of a stronger dollar index and US Treasury yields. Unless any geopolitical event occurs, the trajectory of gold and silver is unlikely to change before the FOMC meeting.
Oil is slightly down as US supplies affected by the hurricane are slowly getting back. On the other hand, oil is in a bullish trend and the upward trend in fuel prices is likely to continue because supply is seriously lagging far behind demand.
Asian tech stocks increased for the first time this week. Chinese stocks were mixed on the back of the China Evergrande Group debt crisis and the central bank’s short-term cash infusion. Hong Kong’s Hang Seng index increased by 0.23% after recording its lowest close in 10 months the day before. Australia’s ASX 200 index decreased by 0.8% as falling iron ore prices hurt mining companies. Chinese blue chips (CSI 300) increased by 0.58%, and Japan’s Nikkei 225 index increased by 0.62%, returning to a 31-year high reached on Monday.
Main market quotes:
- S&P 500 (F) 4,473.75 −6.95 (−0.16%)
- Dow Jones 34,751.32 −63.07 (−0.18%)
- DAX 15,651.75 +35.75 (+0.23%)
- FTSE 100 7,027.48 +10.99 (+0.16%)
- USD Index 92.84 +0.30 (+0.32%)
Important events for today:
- UK Retail Sales (m/m) at 09:00 (GMT+3);
- Eurozone Consumer Price Index (m/m) at 12:00 (GMT+3);
- US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+3).