US stocks closed higher on Monday as the Institute for Supply Management report indicated US economy continues to grow steadily. ISM Manufacturing Index came in at 50.8 after reaching 51.8% in March. While the index declined compared with the previous month it still came in above 50%, which indicates expansion in manufacturing sector. The dollar weakened, the live dollar index data indicate the ICE US Dollar Index, a measure of the dollar’s value against a basket of six major currencies, fell 0.5% to 92.568. The Dow Jones Industrial Average rose 0.7% to close at 17891.6, led by gains in Home Depot and Visa. The S&P 500 advanced 0.8% and settled at 2081.43 led by gains in consumer-discretionary and financial stocks. Lower oil prices weighed on energy stocks, which were the weakest performers among ten major sectors. Nasdaq gained 0.9% snapping a seven day losing streak. An 0.3% rise in construction spending in March due to a 1.5% gain in residential construction spending was another positive factor which supported market sentiment. Improved market sentiment led to higher risk appetite as investors sold off Treasurys pushing yields higher. Further direction of market indices depends on whether incoming macroeconomic data indicate improved outlook for the economy and remaining earnings reports of the S&P 500 surprise on positive side. Today at 15:45 CET April ISM New York index will be released by Markit. And at 16:00 CET May Economic Optimism Index by Investors Business Daily and TechnoMetrica Institue of Policy and Politics will be published. The tentative outlook is positive. At 16:30 CET Federal Reserve Bank of Cleveland President Loretta Mester moderates a panel on how unusual monetary policy will affect financial markets.
European stocks ended lower on Monday as falling bank shares dragged indices lower. The euro strengthened after final Manufacturing PMI for euro-zone was revised higher to 51.7 from 51. Euro hit $1.1536, the highest level since late August. The Stoxx Europe 600 closed with a loss of slightly less than 0.1% weighed by lower bank stocks: Spanish Banco Popular Español sank 3.8%, Italian UniCredit slumped 3.7%. Trading volume was low as London financial markets were closed for the observance of the Early May holiday. Germany's DAX 30 rose 0.8% closing at 10123.27 helped by 1.6% and 2.9% gains in Bayer and Allianz SE respectively. France's CAC 40 added 0.3%. Today at 10:30 CET April Manufacturing PMI will be published in UK. The tentative outlook is positive. At 11:00 CET March Producer Price Index will be released in euro-zone. The tentative outlook is positive.
Asian stocks are retreating today after earlier gains: MSCI's broadest index of Asia-Pacific shares outside Japan is now trading at a three-week low after a 0.4% gain on the day. Japan’s stock market is closed for the Golden Week holiday and will reopen Friday while the yen hit a fresh 18-month high against the dollar today in thin trading. Chinese shares are rising today after investor confidence was boosted by President Xi Jinping’s recently stated support of the “healthy development” of the country’s stock markets despite a report the Caixin China Manufacturing PMI fell for a 14th straight month to 49.4 in April compared with 49.7 in March. A reading below 50 indicates contraction. The Shanghai Composite Index is up 1.87%.
Australian stocks rose 1.94% today after the Reserve Bank of Australia surprised the markets by cutting the interest rates by a 0.25 percentage point to an all-time low of 1.75%. Data last week indicated inflation fell to 1.5%, below the 2% to 3% target policy band.
Oil futures prices are rising today on weaker dollar but gains are limited by concerns of increasing global glut as crude oil output rises in Middle East: OPEC crude-oil production surged by 484000 barrels to 33.217 million a day in April, according to a Bloomberg survey.