September started with renewed buying of tech stocks, which helped the Nasdaq index add 0.33% and close at a new peak yesterday. The Dow Jones industrial index decreased by 0.14%. The S&P 500 index stayed about the same. The national employment report from ADP showed that the US private sector jobs increased by 374,000 in August compared to 326,000 in July, which is much less than the forecast of 613,000. Such statistics have negatively affected the dollar index. Now, investors are waiting for the report on initial jobless claims and non-farm payrolls. If these reports are also lower than the expectations, most likely, the quantitative easing (QE) program will remain unchanged till the end of the year, and the dollar index is heading to a strong decline.
Most European stock indices rose yesterday but closed without a single dynamic. The British FTSE 100 increased by 0.4%, French CAC 40 jumped by 1.2%, Italian FTSE MIB added 0.7%, Spanish IBEX 35 jumped by 1.6%. However, the German DAX decreased by 0.1%. In Germany, shares of tire maker Continental (-2%), real estate company Vonovia (-1.5%), and chemical company BASF (-1.4%) declined the most. European Central Bank Vice President Luis de Guindos said in an interview with Spain’s El Confidencial that Eurozone economies are performing better than expected in 2021, and these improvements will be reflected in further economic forecasts.
Two major factors affected oil prices yesterday. On the one hand, OPEC+ countries agreed to support the current plan to gradually increase supply by 400,000 bpd, which plays in favor of lower oil prices. On the other hand, the US government report on crude oil reserves showed a larger-than-expected drop in inventories, which would push the price up as oil demand remains at a high level. As a result, the oil price fell during the US session, suggesting that the market is paying more attention to the OPEC+ agreement than to oil inventories.
Natural gas continues to set price records. Natural gas inventories reports are expected today. A drop in inventories could lead to even more growth, as the demand is now much higher than supply.
Gold prices haven’t changed much compared to the previous day. The fundamental picture for gold is now in favor of growth, as the soft monetary policy from the Federal Reserve leads to lower US Treasury bond yields, and gold has an inverse correlation to this indicator.
Asian stock indices are trading without a single dynamic. Asia-Pacific’s broadest index outside Japan, the MSCI, decreased by 0.2% from a five-week high. Japan’s Nikkei added 0.2%, and South Korea’s KOSPI lost 0.9%. Bank of Japan member Goushi Kataoka says that the Bank of Japan is ready to increase stimulus if a new wave of coronavirus affects the economic recovery. Japan should not lag behind other countries in supporting the economy with ultra-soft monetary policy.
Main market quotes:
- S&P 500 (F) 4,524.09 +1.41 (+0.03%)
- Dow Jones 35,312.53 −48.20 (−0.14%)
- DAX 15,824.29 −10.80 (−0.07%)
- FTSE 100 7,149.84 +30.14 (+0.42%)
- USD Index 92.52 −0.11 (−0.11%)
Important events for today:
- US Initial Jobless Claims at 15:30 (GMT+3);
- US Natural Gas Storage (w/w) at 17:30 (GMT+3).
