US stock market ended marginally higher on Wednesday as data indicated US economy is growing at a modest pace. The dollar weakened with yen resuming recent strengthening trend against the dollar after Japanese Prime Minister Shinzo Abe announced about the delay of a planned sales-tax hike by two and a half years: the live dollar index shows the ICE US Dollar index fell 0.45% to 95.387. The Dow Jones Industrial Average ended less than 0.1% higher at 17789.67. The S&P 500 edged up 0.1% to 2099.33. Seven of 10 main sectors of the broad market index ended in the positive territory led by consumer staples stocks, offsetting 1% decline in telecommunications stocks. The Nasdaq Composite rose 0.1% posting a seven day win streak. In economic data ISM Manufacturing index rose 0.5 points to 51.3 in May instead of a 0.4 point expected decline. Construction spending fell 1.8% in April due to a decline in residential spending, and US auto sales slumped in May. The Federal Reserve’s Beige Book, a collection of anecdotes about the economy, painted a picture of economy consistent with ISM: economic growth continues at a slow pace with consumer spending and employment posting mostly modest growth in most districts. As investors are cautious ahead of important events like the OPEC meeting and the European Central Bank policy meeting today, US jobs report for May due Friday stocks are expected to trade in a narrow range with valuations at historical highs. Today at 14:15 CET May Employment Change will be published by ADP. The tentative outlook is positive. At 14:30 CET Initial Jobless Claims and Continuing Claims will be released in US. At 14:35 CET Federal Reserve Governor Jerome Powell will participate in a panel discussion about prudential regulation in Washington DC. And at 16:30 CET Natural Gas Storage Change will be released by the Energy Information Agency.
European stocks closed lower on Wednesday for a second straight session after weak Chinese manufacturing data spurred concerns about slowing growth of the world’s second-largest economy. The euro strengthened against the dollar ahead of the European Central Bank policy meeting today. The Euro Stoxx 50 index closed down 0.81% with miners and metals producers slumping after the release of the private Caixin purchasing managers index for manufacturing in China: the Caixin index slipped to 49.2 from 49.4 in April. China is a major consumer of metals. ArcelorMittal dropped 2.8%, Boliden SE lost 2% and Anglo American PLC closed down 1.3%. Germany’s DAX 30 fell 0.6% to 10204.44, France’s CAC 40 lost 0.7% and UK’s FTSE 100 dropped 0.6%. In other economic news the final reading of euro-zone manufacturing PMI came in unchanged at 51.5 for May. The Organization for Economic Cooperation and Development revised upward to 1.6% from 1.3% its euro-zone growth forecast for this year but warned that global growth is weakening. Today at 13:45 CET European Central Bank releases its interest rate decision. No change in policy is expected. And at 14:30 CET ECB press conference will start.
Asian stocks are mixed today after weak Chinese manufacturing data the prior day. China’s Shanghai Composite Index is up 0.4% following three straight winning sessions supported by hopes that global index provider MSCI will soon add mainland listed stocks to its Emerging Markets Index. Nikkei fell 2.3% today as yen extended gains against the dollar after Prime Minister Shinzo Abe’s decision to delay the sales tax hike by two and a half years.
Oil futures prices are rising today on expectations major producers may agree about an output ceiling at the Organization of the Petroleum Exporting Countries(OPEC) meeting in Vienna today. Iran is seen as the major producer opposing an output freeze as it has stated previously it plans to boost crude oil output and exports to regain the 2 million barrels per day export levels it maintained before the imposition of international sanctions. It is not likely a production ceiling agreement will be reached with Saudi Arabia, Iraq and Iran competing to increase their market share in Asia. August Brent crude fell 0.3% to $49.72 a barrel on London’s ICE Futures exchange yesterday. At 17:00 CET today Crude Oil Inventories will be released by the Energy Information Administration. Industry group American Petroleum Institute forecast a 2.4 million barrel expansion in US crude stockpiles.