Global stocks rise as investors weigh future of United States rates
- Author: Anthony Vega Sep 01, 2016,
Sep 01, 2016, 1:05
Japanese policy makers eager to see the yen weaken may be thankful for the latest bout of hawkishness on USA interest rates from top Federal Reserve officials.
The Dow Jones Industrial Average fell 0.26% to 18,454.30 points, the S&P 500 edged down 0.20% to 2,176.12 points and the Nasdaq shed 0.18% to 5,222.99 points.
USA stock index futures were little changed on Tuesday as investors waited for more clues on the timing of the next interest rate hike.
Supporting the case for higher rates was a report that showed consumer spending, which accounts for more than two-thirds of USA economic activity, rose for the fourth straight month in July. Her remarks put the spotlight on labor figures due September 2, which are projected to show the economy added 180,000 jobs in August, following a gain of 255,000 in July.
"The market continues to remain sceptical over the possibility of a September rate hike although is more confident that the Fed will resume rate hikes this year attaching around a 60% probability that a rate hike will be delivered by December".
Brent crude futures were up 29 cents at $49.55 a barrel, USA crude added 39 cents to $47.36, while gold slipped 0.2 percent at $1,320.79 per ounce.
Besides that, over the weekend, Germany's Vice Chancellor who is also Germany's economy minister Sigmar Gabriel said that: U.S. -EU free trade talks that are known as the talks on the Transatlantic Trade and Investment Partnership (TTIP) have failed, which can't be helpful for stimulating global trade growth.
Shares of Apple fell 0.5 percent to $106.32, after European Union antitrust regulators ordered the iPhone maker to pay $14.5 billion to the Irish government, ruling that a scheme to route profits through Ireland was illegal state aid.
The dollar index rose 0.11 percent, trading at more than a two-week high, while oil prices slipped more than 1.5 percent. The S&P Core Logic Case-Shiller 20-City Composite index rose 5.1% year-on-year, compared to expectations for an increase of 5.2% and May's revised 5.3% increase. With the period of uncertainty dispelled from last week's hawkish comments from Yellen, the Dollar could be set for further gains as bets intensify over the Fed hiking rates.
Yields on thirty-year securities dropped seven basis points, the most in about four weeks, amid month-end purchasing by funds to match duration benchmarks.
"You'd want to be above 200,000 to err on the side of the Fed doing anything, I would've thought", said Tim Kelleher, head of institutional foreign exchange sales at ASB Bank.
At the same time oil prices fell as the dollar strengthened, making crude imports more expensive for holders of other currencies. Oversupply remained a major concern, with US crude stockpiles forecast to have risen by 1.3 million barrels last week, a Reuters poll showed.
Safe-haven spot gold (XAU=) rebounded from a near five-week low of $1,314.70 after the dollar pared its gains.