Daily Stocks Update: Markets Pricing in Fed Hike & ECB Easing – Feb 29, 2016

Daily Stocks Update: Markets Pricing in Fed Hike & ECB Easing - Feb 29, 2016

US equity indices seemed to shrug off positive news from the US economy, as the Q4 2015 GDP was upgraded from 0.7% to 1.0% instead of being downgraded to the estimated 0.4% figure. Personal spending and income both ticked up by 0.5%, also beating analysts’ expectations.

Even so, the Dow 30 index closed 57.32 points down to 16,639.97 (-0.34%), the S&P 500 index lost 3.65 points to 1,948.05 (-0.19%) while the Nasdaq advanced 8.3 points to 4,590.5 (+0.18%). The S&P 500 VIX, which is considered a gauge of market uncertainty, rose 0.70 points to 19.81 (+3.66%) to indicate that risk aversion was still in play.

Futures are in the red for now, as Dow 30 index futures for March delivery are down 25.5 points (-0.15%), S&P 500 index futures are down 2 points to 1,940.75 (-0.10%), and Nasdaq futures are down 11 points to 4,219.00 (-0.26%).

European stocks closed higher, futures mixed

Sentiment was a bit more positive in the European markets, as indices closed higher on Friday and futures are up today. The German DAX ended 181.82 points up to 9,513.30 (+1.95%), the French CAC 40 closed 66.12 points up to 4,314.57 (+1.56%), and the Euro Stoxx 50 closed 52.59 points up to 2,390.01 (+1.83%).

Data from the euro zone was mostly weaker than expected, with preliminary CPI readings from the top economies falling short and increasing the odds of additional ECB easing, which European companies and individuals might welcome. German DAX futures are down 18.4 points (-0.19%), French CAC 40 futures are down 10.2 points to 4,284.1 (-0.24%), and Euro Stoxx 50 futures are up 43.5 points (+1.51%).

In the United Kingdom, the FTSE was able to lock in a gain of 83.20 points on Friday (+1.38%) but futures are down 8.7 points (-0.14%) as of this writing. UK PMI readings from the manufacturing, construction, and services sectors are due today.

Asian markets shaky post-G20 and weekend reports

Asian equities and future also looking mixed so far, as investors are pricing in the outcome of the G20 Summit and the reports released over the weekend. G20 heads agreed to avoid competitive currency devaluation or warn each other if they’re about to use such mechanism while data from New Zealand, namely building consents and the ANZ business confidence index, came in mostly weaker than expected.

Economic data from Japan was also mixed, as retail sales fell short while preliminary industrial production showed a strong gain. Traders are still on their toes when it comes to a potential oil production cap from OPEC and non-OPEC nations, as leaders are set to meet next month.


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.