Monday, 10 April 2017

US equities under pressure over increasing geopolitical tensions

Posted by Fort Financial Services at 14:55 Labels:

US equities were set for a flat opening on Monday, with geopolitical tensions still weighing on market sentiment and as investors looked ahead of further economic data later this week.
Wall Street top three benchmarks ended lower on Friday amid mixed employment reports and increasing worries that the United States will engage in aggressive combat in Syria.
On Thursday, President Donald Trump ordered the US military to fire dozens of missiles to destroy a Syrian airbase in response to Bashar Al-Assad’s chemical attack in the Idlib province.
Increasing uncertainty translates into a wider demand of safe haven assets such as gold, the japanese yen or even the US dollar. Also, crude oil prices moved higher following the news as any instability in the Middle East is seen as a positive due to possible production disruptions.
The Dow Jones industrial average was down by nearly 6 points at the end of trades, with Goldman Sachs falling the most. The S&P 500 also finished with small losses, with utilities as a top decliner. The Nasdaq composite followed others’ trend, closing near breakeven.
  • Dow Jones Industrial Average: -0.03 percent / 20656.10 points
  • Standard & Poor’s 500: -0.08 percent / 2355.54 points
  • Nasdaq Composite: -0.02 percent / 5877.81 points
According to the US Labor Department, the private sector added 98,000 jobs in March, falling really short from expectations of a 180,000 jobs build. However, the unemployment rate dropped notably to 4.5 percent from a previous reading of 4.7 percent. Wages didn’t move as expected neither, growing by 2.7 percent as for average hourly earnings.
Market participants also paid attention to the last of the US-China summit at Mar-a-Lago resort in Florida. President Trump and his Chinese counterpart Xi Jinping met to discuss a large number of subject, including jobs and trade relations.
Trump said during a press conference that “the relationship developed by President Xi and myself I think is outstanding. We look forward to being together many times in the future. And I believe lots of very potentially bad problems will be going away.”
New York Fed President William Dudley gave a speech at the Princeton Club of New York on Friday, in which he said the government should consider little changes to the Dodd-Frank Act. Dudley also said that cutting Fed’s massive balance sheet could pause interest rate cuts.
Today, investors will be following remarks by Fed Chair Janet Yellen as of 20:10 GMT at the University of Michigan as speculation builds on a June interest rate hike.

Fort Financial Services

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