Daily Stock Markets Review: US Equities Down Ahead of FOMC Minutes – Apr 6, 2016

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Daily Stock Markets Review: US Equities Down Ahead of FOMC Minutes - Apr 6, 2016

US equities were unable to sustain their winning streak this week as traders probably booked profits ahead of today’s release of the FOMC meeting minutes. The Dow 30 index ended 133.68 points down to 17,603.32 (-0.75%), the S&P 500 index was down 20.96 points to 2,045.17 (-1.01%) and the Nasdaq was down 47.86 points to 4,843.93 (-0.98%).

The S&P 500 VIX, which is considered a gauge of market uncertainty, rose 1.30 points to 15.42 (+9.21%). Recent testimonies from Fed officials suggested a hawkish or optimistic bias but Fed Chairperson Janet Yellen also reiterated that additional caution must be practiced before tightening monetary policy again.

Data from the US economy was mostly stronger than expected, as the ISM non-manufacturing PMI indicated a faster pace of expansion in the industry. Even thoug the trade balance showed a wider deficit, components of the report indicated gains in both imports and exports.

Risk aversion weighs on European and Asian equities

Asian and European markets ended mostly lower yesterday as risk aversion was in play, spurred partly by news that Saudi Arabia is blocking ships containing Iranian crude oil from entering its waters. The Reserve Bank of Australia decided to keep rates unchanged while issuing a relatively upbeat statement, although policymakers also warned about potential negative repercussions of Aussie strength.

The German DAX ended 258.72 points down to 9,563.36 (-2.63%), the French CAC 40 was down 94.94 points to 4,250.28 (-2.19%), and the Euro Stoxx 50 index slid 66.82 points down to 2,895.46 (-2.26%). In the United Kingdom, the FTSE was down 73.49 points to 6,091.23 (-1.19%) despite having the services PMI improve from 52.7 to 53.7.

Asian markets mixed, commodities rebound

Asian equities are looking mixed so far, although some gains were spurred by a rebound in commodity prices. The API reported a decline in crude oil stockpiles of 4.3 million barrels while New Zealand showed a 2.1% gain in its dairy price index after the latest GDT auction.

The S&P ASX 200 is up 8.41 points to 4,932.80 (+0.17%), the DJ New Zealand is down 0.37 points to 217.87 (-0.16%), and the Nikkei is down 20.14 points to 15,712.68 (-0.13%). WTI crude oil recovered to $36.67/barrel and Brent crude oil rose to $38.48/barrel. Gold prices are also up to $1,232.10/ounce while silver is up to $15.140/ounce.

 

To contact the reporter of the story: Samuel Rae at samuel@forexminute.com

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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.