US economic events were mostly upbeat on Friday, as the Q1 GDP reading was upgraded from 0.5% to 0.8% as expected while Fed Chairperson Janet Yellen acknowledged that the US economy continues to recover. She also suggested that rate hikes are appropriate in the coming months but did not specify if one will take place in June.
The Dow 30 index closed 44.93 points up to 17,873.22 (+0.25%), the S&P 500 rose 8.96 points to 2,099.06 (+0.43%) and the Nasdaq was up 31.74 points to 4,933.50 (+0.65%). Dow 30 futures for June delivery are up 51.5 points (+0.29%), S&P 500 futures are up 5.50 points (+0.26%) and Nasdaq futures are up 12.75 points (+0.28%).
The S&P 500 VIX, which is considered a gauge of market uncertainty, is down 0.31 points to 13.12 (-2.31%) to indicate that risk appetite is present in the financial markets.
European markets also with feeble gains
Traders in Europe appear to be a little more cautious, as their equity indices and futures have posted smaller gains ahead of this week’s event risks. The European Central Bank is scheduled to announce their monetary policy decision midweek while the UK will be printing its latest business PMI readings from the manufacturing, services, and construction sectors.
The German DAX closed 13.60 points up to 10,286.31 (+0.13%) with futures up 51.3 points (+0.50%). The French CAC 40 rose 2.10 points to 4,489.5 (+0.05%) and futures are up 9.5 points (+0.21%). The Euro Stoxx 50 is up 3.69 points to 3,074.90 (+0.12%) and futures are up 10 points (+0.33%).
Commodities retreat ahead of Chinese PMI, OPEC meeting
Commodity prices are looking weaker, as investors likely booked profits ahead of the OPEC meeting on June 2. No actual changes in production levels are expected while members have shown reluctance to freeze output, especially since crude oil has climbed to the $50/barrel levels recently.
WTI crude oil is down to $49.18/barrel while Brent crude oil retreated to $49.70/barrel. Gold is down to $1,204.75/ounce and silver is trading at $15.955/ounce. Traders are also cautious ahead of the release of the manufacturing and non-manufacturing PMI readings from China, as the official manufacturing PMI is slated to fall from 50.1 to 50.0 while the Caixin version could dip from 49.4 to 49.3. The non-manufacturing version of these reports could also post declines, weighing on overall market sentiment throughout the week.
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