Daily Stocks Update: Risk Appetite Returns in New York Hours

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While earlier trading sessions were dominated by risk-off flows as traders continued to price in expectations of additional easing from major central banks, risk-taking resumed during the New York hours and propped equity indices up. The Dow 30 index closed 222.44 points up to 17,928.35 (+1.26%), the S&P 500 index closed 25.70 points higher to 2,084.39 (+1.25%), and the Nasdaq was 59.67 points up to 4,809.88 (+1.26%).

The S&P 500 VIX, which is considered a gauge of market uncertainty, edged 0.94 points down to 13.63 (-6.45%) to reflect lower risk aversion. Commodity prices recovered late in the day after the US Energy Information Administration revised their global demand forecasts higher for this year and the next. WTI crude oil is at $44.46/barrel and Brent crude oil is at $45.34/barrel.

European markets record gains despite bleak data

Stock markets in Europe also closed higher even though data from the euro zone turned out weaker than expected. In particular, German industrial production sank 1.3% instead of showing the projected 0.2% dip while French industrial production fell 0.3% instead of gaining by 0.6%. The German DAX closed 64.95 points up to 10,045.44 (+0.65%), the French CAC 40 closed 15.40 points higher to 4,338.21 (+0.36%), and the Euro Stoxx 50 closed 17.99 points up to 2,973.82 (+0.61%).

There were no major reports out of the UK but investors appear to be positioning ahead of the BOE Super Thursday, which has the monetary policy decision, meeting minutes, and revised economic forecasts. For today, the UK manufacturing production report is due and a 0.4% rebound is eyed. Industrial production is expected to rise by 0.7% but weak data could force equities to retreat. The London FTSE is up 41.84 points to 6,156.65 (+0.68%).

Asian markets benefit from risk-taking

Asian equities are also seeing more green today, perhaps taking part of the risk rallies in the previous sessions. The China A50 index is up 50.53 points to 9,365.30 (+0.54%), the S&P ASX 200 index is up 25.41 points to 5,368.40 (+0.48%), and the Nikkei is 89.67 points higher to 16,654.18 (+0.54%).

In Australia, the Westpac consumer confidence index jumped 8.5%, recovering from the earlier 4.0% decline to indicate a strong improvement in sentiment. Meanwhile, the RBNZ Financial Stability Report didn’t contain any major changes to lending conditions, suggesting that the central bank isn’t set on cutting interest rates just yet.

 

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.