Wall Street indexes rose amid hopes for restoring US-China trade dialogue

in #steempress6 years ago


The US indexes rose on Tuesday after trade optimism led to a increase in stocks for industrial companies, while the technology sector started its recovery. During the trading session the crude oil prices sink and the US dollar returned to growth.

The broader S&P 500 index reached a fourth consecutive monthly increase after Boeing, Caterpillar and 3M rose by more than 1% after restart of the trade negotiations between the US and China.

The shares of FANG (Facebook, Amazon, Netflix and Google), which includes the shares of technology companies with mega capitalization, rose while investors expected the financial statement of Apple.

The blue-chip index Dow Jones Industrial Average added 108.36 points to 25,415.19 points, and 3M, Caterpillar and Pfizer were the best-performing components. The broader S&P 500 jumped by 0.5% to 2,816.29 points, with the industry subsector adding more than 2% to its value. The technological Nasdaq Composite expanded by 0.6% to 7,671.79 points.

Tuesday was the last trading day in July, and the main indexes recorded strong monthly growth. Dow Jones and S&P 500 expanded by 4.7% and 3.6% respectively - the highest monthly growth since January. Dow added 5.8% in January, while the S&P 500 rose by 5.6%. Nasdaq, meanwhile, climbed by more than 2% in July and posted fourth consecutive monthly growth.

Japanese bond yield fell to its lowest level since November, after Japan's central bank showed interest rates would remain low for "a long period of time".

The commercial optimism alleviated concerns for investors who have witnessed a blocked weeks of disputes, while both countries - China and the United States - have refused to give up. The next wave of US tariffs can be introduced as early as Wednesday, with the possible imposition of duties on Chinese imports for another 16 billion USD. The officials in Beijing promised to respond with the same rate of duty on US products.

Shares of major exporters Boeing and Caterpillar rose by 1.5% and 2.9%, respectively. Deere shares rose by almost 5%.

The corporate reporting season continued on Tuesday with reports by two of the S&P 500 companies - Procter & Gamble and Pfizer, which posted profits that exceeded analysts' estimates.

Later today, the Apple report is expected to be another component of the broad index, an event that will inevitably impact the markets.

Nearly 60% of the S&P 500 companies have already announced their second-quarter reports, with 78% of them performing better than expected.

Beyond corporate reports in the US, some macroeconomics data was released on Tuesday. For example, it has become clear that consumer spending in the US rose by 0.4% in June, while the key inflation indicator - the increase in consumer goods - rose at an annual rate of 2.2% for the second consecutive month. These are the biggest increases for these two indicators over the past six years. The Department of Commerce said the increase in consumer spending came after an even stronger score of 0.5% in May. It was adjusted to the projected initial 0.2%. The income increased by 0.4% in June, or as much as in May.

The Federal Reserve (Fed) is starting today its two-day monetary policy meeting. The decision is scheduled for Wednesday, with investors not expecting interest rates to rise.

On the bond market, the 10-year US government bond yields declined to 2.962%. The yield on 30-year government securities also reported a slight decline to 3.078%.

In the forex markets, the Japanese yen is about to register its biggest decline in almost three weeks after the central bank pledged to keep its low interest rates and said it would make its policy more flexible with regard to the long-term target for yield on government bonds .

The Japanese currency depreciated by 0.59%, traded at a level of 111.72 yen per dollar.

The US dollar index, which measures the value of the dollar against six competing currencies, rose by 0.18% to 94.50 points.

In the commodity market, the oil prices fell, with Brent's futures decreasing by 0.67 USD, or almost 1%, to 74.30 USD per barrel after rising almost a month on Monday. The futures on West Texas Intermediate (WTI) oil variety also fell by 1.12 USD, or 1.6%, to 69.01 USD per barrel.


Posted from my blog with SteemPress : http://financeandmarkets.com/wall-street-indexes-rose-amid-hopes-for-restoring-us-china-trade-dialogue/

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