USA stocks are solidly higher early Monday, June 6, 2016, as energy companies rise along with the price of oil.
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While sterling weakness could benefit the FTSE’s worldwide companies, it is also likely to impact domestic consumer confidence.
Asian shares dipped to near three-week lows while safe haven assets such as US bonds and the yen were in demand on Wednesday on growing anxiety Britain will choose to leave the European Union next week.
The Dow Jones Industrial Average was up 66.74 points, or 0.38 percent, at 17,741.56.
On Wall Street, S&P 500 Index .SPX hit a three-week low to end at 2,075.32 on Tuesday, down 0.18 percent, in its fourth consecutive drop, led by a 1.45 percent fall in financial shares .SPSY .
Yields on the German government’s 10-year bonds also turned negative for the first time meaning investors now have to pay interest to even have them. The blue-chip CSI 300 index rose 1.3 per cent.
Frankfurt’s DAX 30 also gained 0.9% and the Paris CAC 40 was up by 1%.
Fed funds futures FF: show investors see nearly no chance of the Fed raising US interest rates on Wednesday after the dismal USA payrolls report for May. The Fed had been expected to raise interest rates, but following some weak economic data, including the most recent monthly jobs report, it now appears likely to wait.
In Europe, shares were rising after a five-day losing streak caused by jitters over next week’s British referendum on European Union membership, with Zodiac Aerospace surging after posting higher sales. Polls show the vote could go either way and investors are starting to worry about the consequences. The repercussions, however, are not clear and investors are reacting to the general uncertainty over the situation.
Boris Johnson – the Leave campaigner accused of “dog-whistle racism” for criticising Obama based on his “part-Kenyan” ethnicity – said that the European Union is a problem for the United Kingdom because “it has led to the absurd situation in which we stop highly qualified people coming from around the world who could contribute enormously to our society because we cannot stop millions of unskilled people coming here from the European Union”.
Credit card company stocks fell sharply after Synchrony Financial, the country’s leading issuer of store brand credit cards, warned that more of its customers were falling behind on payments.
Jasper Lawler, analyst at CMC Markets, described the day as a “bit of a Brexit breather” but added that the rebound was also “more a function of short-covering ahead of the Federal Reserve meeting than any sudden desire to take risk”.
Markets paused for breath after the recent Brexit-led declines, with the spotlight falling instead on the latest decision on USA interest rates due after the close in London.
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Oil prices fell, with global benchmark Brent crude, dropping for a fifth consecutive day.
