US stocks end little changed - 21.7.2017

Dow and SP 500 slip while Nasdaq closes at record

US stocks inched lower on Thursday as weak corporate reports weighed on market sentiment. The dollar resumed the tumble: the live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, fell 0.6% to 94.241. Dow Jones industrial average lost 0.1% closing at 21611.78 dragged by 4.1% drop in Home Depot. The S&P 500 slipped 0.38 points settling at 2473.45 led by materials and industrials stocks. The Nasdaq index gained 0.1% to 6390.00 in tenth winning session in a row.

Positive earnings underpin stock prices which rallied to historical highs on expectations of pro-growth policies pledged by President Trump. US quarterly earnings are expected to have climbed 8.6%, according to Thomson Reuters I/B/E/S. About 15% of S&P 500 companies have posted results so far. With investors counting on improving earnings to justify high stock valuations continued political turmoil may spur increased volatility as the Trump administration White House is being distracted by investigations of allegations of Russian meddling into election. Shares of Lowe’s Companies and Home Depot dropped more than 4% on news that Sears will sell Kenmore-branded appliances through Amazon.com. Market’s reaction to positive economic data was muted: initial jobless claims declined, nearing a 44-year low, though the Philadelphia Fed’s manufacturing survey reported current business conditions also declined in July to the lowest this year.

Euro jumps after Draghi comments

European stocks ended lower on Thursday as euro rallied after European Central Bank President Mario Draghi said officials would discuss altering the central bank’s bond-buying program in an autumn meeting. The British Pound extended losses against the dollar. The Stoxx Europe 600 closed 0.4% lower. Germany’s DAX 30 slipped 0.04% closing at 12447.25. France’s CAC 40 lost 0.32% while UK’s FTSE 100 ended 0.77% higher at 7487.87. Indices opened lower today.

Investors sold the exporter stocks as stronger euro hurts their earnings outlook by making euro-zone products more expensive in overseas markets. As Mario Draghi emphasized that inflation was still subdued, his words that the ECB Governing Council won’t really think about tapering until the fall were interpreted that policy makers consider tapering the €60 billion a month bond purchases program in 2018. The euro advanced 1% against the dollar, weighing on stock indices.

Asian markets down

Asian stock indices are mostly lower today. Nikkei lost 0.2% to 20095.50 as yen continued the rise against the dollar despite Bank of Japan indicated it will keep the ultra-loose monetary policy longer than other major central banks. Chinese stocks are mixed: the Shanghai Composite Index is down 0.2% while Hong Kong’s Hang Seng Index is 0.02% higher. Australia’s All Ordinaries Index is down 0.7% despite continued slide of the Australian dollar against the greenback.

NIKKEI

Oil advances ahead of OPEC meeting

Oil futures prices are edging higher as members of the Organization of the Petroleum Exporting Countries (OPEC) are scheduled to meet other major producers in St. Petersburg, Russia, on Monday to discuss whether more action is needed to support prices. Prices retreated on Thursday on concerns about continued global inventory glut. Brent for September settlement fell 0.8% to end the session at $49.30 a barrel on the London-based ICE Futures Europe exchange.