US stocks rise after Fed minutes - 12.10.2017

SP 500, Dow and Nasdaq close at records

US stocks closed at record highs on Wednesday after Fed minutes revealed some policy makers advocated cautious approach to further rate hikes. The dollar weakened: the live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, retreated 0.3% to 92.955. The S&P 500 rose 0.2% settling at a record 2555.24. The Dow Jones added 0.2% to new record high 22872.89 led by gains in Johnson & Johnson and McDonalsd’s. Nasdaq composite gained 0.3% to fresh record high 6603.55.

Treasury yields inched higher as Fed September 20 meeting minutes showed majority of Federal Open Market Committee’s members were in favor of one more rate increase this year. At the same time some members wanted to see further economic data before another rate hike. While Federal Reserve’s stance was seen less hawkish than previously expected, markets still see a third rate hike coming in December: fed funds futures traders are pricing in an 87% chance of a quarter-percentage point rate increase in December, according to CME Group’s FedWatch tool. Outgoing Federal Reserve Vice Chairman Stanley Fischer said Wednesday the central bank doesn't see an unsustainable bubble building in asset prices. Kansas City Fed President Esther George reiterated her stance that waiting for inflation to hit the central bank’s 2% inflation target would be a mistake, while Chicago Fed President Charles Evans, a voting member, said a December interest rate increase wasn’t a sure thing.

Spanish stocks recover

European stocks ended little changed on Wednesday as concerns about Catalonia secession subsided. Both the euro and British Pound extended the winning streak against the dollar. The Stoxx Europe 600 index was flat. Germany’s DAX 30 gained 0.2% to 12970.68. France’s CAC 40 slipped less than 0.1% and UK’s FTSE 100 edged lower 0.1% to 7533.81. Indices opened mostly lower today.

Spanish stocks recovered as investor confidence was boosted after Catalonia’s leader Puigdemont told the parliament late Tuesday he still intends to declare independence for the Spanish region but was suspending the secession process to allow negotiations with the central government in Madrid first. Spain’s Prime Minister Mariano Rajoy on Wednesday demanded that the Catalan leader clarify whether he declared independence in his speech before parliament. No major economic data were released Wednesday in euro-zone.

Asian markets mixed

Asian stock indices are mostly higher today. Nikkei rose 0.3% to 20952.00 as yen climbed against the dollar. Chinese stocks are mixed: the Shanghai Composite Index is 0.02% lower while Hong Kong’s Hang Seng Index is up 0.3%. Australia’s All Ordinaries Index added 0.3% despite stronger Australian dollar against the greenback.

NIKKEI

Oil lower ahead of US inventory data

Oil futures prices are falling today as the American Petroleum Institute industry group reported late Wednesday US crude stocks rose by 3.1 million barrels to 468.5 million barrels last week. Prices ended higher yesterday after OPEC raised its forecast for growth in global demand for oil for this year and 2018 by around 30 thousand barrels a day from its previous demand increase forecast. December Brent crude rose 0.6% to $56.940 a barrel on Wednesday on ICE Futures exchange in London.