Monday, 7 August 2017

US equity indexes to open higher; inflation in focus

Posted by Anonymous at 13:58 Labels:

Wall Street three major stock indexes were set for a higher open on Monday as traders prepared for key inflation on Friday and a batch of FOMC speakers are on the schedule.

On Friday, US equity indexes ended in green territory, with the Dow Jones industrial average breaking into a fresh high of 22,092.81, adding 66.71 points by the closing bell.

The S&P 500 rose nearly 0.2 percent to settle at 2,476.84, as financial components provided support to the benchmark. The Nasdaq edged higher 0.18 percent to trade at 6,351.56.

  • Dow Jones Industrial Average: 66.71 / 0.30% / 22092.81
  • Standard & Poor’s 500: 4.67 / 0.30% / 2476.83
  • Nasdaq Composite: 11.22 / 0.18% / 6351.56

The banking sector was one of the best performers in the session, with Goldman Sachs leading stocks to the upside. ETF SPDR S&P Bank added 0.81 percent.

The US Labor Department published its long-awaited July employment report. According to nonfarm payrolls, the economy created 209,000 jobs last month, outperforming an expected jobs build of 183,000. Investors were cheered by the report, which was seen as very solid.

Other data included the average hourly earnings, which rose 0.3 percent in the prior month, coming in line with analysts expectations. The participation rate stood at 62.9 percent, while the unemployment rate ticked down to 4.3 percent.

The data front also counted on trade balance figures for June. The US Commerce Department said national trade deficit notched down to $43.6 billion from a prior $46.4 billion. Economists had forecasted a move to $45.0 billion.

These gave a noticeable impulse to the American currency. The US dollar index, which tracks the greenback against a basket of six major rivals, was able to leave a 15-month low behind as expectations for a Federal Reserve rate hike later this year rebounded.

According to Fed funds tracked by CME Group's FedWatch tool, traders are pricing in a 42.5 percent probability of a rate adjustment on the last month of 2017.

Ahead in the session, traders will be paying close attention to a batch of speeches from FOMC officials, including Bullard and Kashkari as of 15:45 GMT and 17:25 GMT respectively.

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