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US stocks open slightly higher in busy news week

Apr 03 2017 16:19
Bloomberg: Eddie van der Walt and Eric J. Weiner

New York - US stocks opened slightly higher on Monday while European shares were flat at the start of a busy week that includes a meeting between Xi Jinping and Donald Trump and culminates in the monthly US jobs report.

The S&P 500 Index was up 0.07% at 2 364.30, while the Dow Jones Industrial Average also rose 0.07% to 20 678.19. The S&P 500 finished the first quarter up 5.5%, its biggest advance since 2015. The Stocks Europe 600 Index gained as much as 0.4% before creeping back, while the euro was on track to end its longest run of losses versus the dollar since February.

Energy companies benefited as oil held above $50 a barrel. South Africa’s rand slumped for a sixth day after Finance Minister Pravin Gordhan was dismissed in a political shake-up. Russia’s ruble held declines after a subway blast in the St. Petersburg subway.

As the second quarter gets going, political developments threaten to cloud the improving global economic outlook. The first major data release showed confidence among Japan’s large manufacturers improved for a second consecutive quarter in the first three months of the year. The pound fell for the first time in three days against the dollar as UK manufacturing growth unexpectedly cooled.

"The challenge for markets in an event-filled week will be to contend with the conflicting signals stemming from the Trump administration’s fiscal and trade policy agendas," ING Groep strategists, led by Chris Turner, wrote in a note.

"In particular, investors will be asking whether the White House clampdown on trade will be aggressive enough to directly thwart any US reflation sentiment founded on renewed tax reform hopes."

What investors will be watching this week:

Fed speakers include Dudley and Governor Daniel Tarullo. Minutes from the March meeting, which are scheduled to be released April 5, should put their recent public comments into perspective. Minutes are also due from the European Central Bank’s latest gathering. China’s President Xi Jinping will meet US President Donald Trump for two days starting April 6. 

The Reserve Bank of Australia is projected to keep rates steady on Tuesday.  India’s central bank also will probably hold rates firm. Inflation numbers are due from Thailand, South Korea and the Philippines. US non-farm payrolls are due April 7.

Here are the main moves in markets:

Stocks

The Nasdaq 100 Index rose 0.2% and the Russell 2 000 Index was up 0.19% as of 15:36. The Stoxx Europe 600 climbed 0.06%, after increasing 5.5% for the first three months of the year, the best quarter in two years. The MSCI All Country World Index was down roughly 0.5%.

Currencies

Britain’s pound fell as much as 0.5% to $1.2487 after the worse-than-expected manufacturing data. The euro advanced 0.1% to $1.0664 and the Bloomberg Dollar index climbed 0.1%. The rouble retreated 0.1% to 54.32 versus the dollar. About 10 people were killed and 20 injured in the subway blast, according to the Interfax news agency.

Bonds

The yield on 10-year UK debt fell 4 basis points. German Bunds were down 3 basis points.

Commodities

WTI crude was up 0.4% at $50.78 a barrel, after the biggest weekly gain of the year. Crude stockpiles are starting to decline in a sign that the production cuts implemented this year are bringing the market to balance, according to OPEC’s Secretary-General Mohammad Barkindo. Gold fell 0.1% to $1 247.72 per ounce. The metal has alternated between gains and losses for the past six days.

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