Sept 13 Wall Street opened lower on Tuesday, with energy stocks falling on lower oil prices and financials hit by diminished prospects of an interest rate hike in the near term. Eastern time. The Standard & Poor’s 500 index picked up 8 points, or 0.4 percent, to 2,13.
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Federal Reserve Governor Lael Brainard Monday argued for a cautious approach to raising rates, abating worries about higher rates sparked by another Fed official last week.
After Fed official Lael Brainard, stated the USA economy should manifest more signs of stability so they could increase the appreciation of the dollar in comparison with other currencies.
Weak inflation and uncertainty ahead, “counsels prudence in the removal of policy accommodation”, she went on.
Frankfurt, Paris and London all shed more than one percent, while Japan’s Nikkei lost 1.7 percent and Hong Kong 3.4 percent.
US stocks had plunged late last week after Federal Reserve Bank of Boston President Eric Rosengren said there’s a case to be made the USA central bank should raise rates sooner rather than later. She further warranted for a stronger trend in consumer spending and evidence of stabilizing inflation before the central bank raises policy rates.
The lower chance of a rate hike is typically supportive of the stock markets.
Future traders are now pricing in a 15 percent chance of a hike at the Fed’s September 20-21 policy-setting meeting, down from 21 percent earlier on Monday, according to the CME Group’s FedWatch Tool.
U.S. stocks racked up their strongest gain in two months on Monday, with the Dow rising 1.3 per cent and the S&P 500 gaining 1.5 per cent.
If the dollar falls below its recent low of Y101.20 seen on September 7, the US currency may fall further, said Mr. Kadota. Higher rates threaten stocks by making interest-paying savings accounts and bonds more attractive to investors. Toward 1800 GMT, while the S&P 500 was up 0.9 percent. Sterling held steady at $1.3335, having risen from levels seen at the end of last week when it traded at $1.3270. Holdings in gold-backed exchange traded funds added 0.6 metric ton to 2 020.3 tons on Monday, data compiled by Bloomberg show.
“But then the dovish comments from Fed’s Brainard have been calming down markets again, and we see bonds up a bit”. HP rose 57 cents, or 4.1 percent, to $14.41. His comments – and anxiety about what Brainard might say – sent stocks tumbling Friday.
Italy’s 10-year bond yield fell two basis points to 1.26 percent, declining from the highest since June, while Spain’s slipped three basis points to 1.06 percent. The gain came despite concerns about the hefty price of the deal and Renesas’ ability to establish itself as an industry leader in fields such as self-driving cars.
OIL: U.S. crude rose 17 cents to $46.05 a barrel in NY.
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CURRENCIES: The euro was flat at $1.1233 while the dollar rose 0.4 percent to 102.27 yen.
