As earnings season draws to a close, investor focus will shift to Federal Reserve Chair Janet Yellen’s speech on Friday at the annual central bankers’ meeting in Jackson Hole, Wyoming, to assess the odds of an interest rate hike in the coming months.
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The market fell due to a mixture of profit-taking from Monday’s short gain and the “risk-off mood” ahead of Yellen’s speech, said Victor Felix, an analyst with Manila-based AB Capital Securities.
Sterling’s foray above the threshold was, however, short-lived as it shortly retreated to $1.3180, 0.37% higher against the dollar. There’s a 26 percent chance the USA central bank will increase rates at its September 20-21 meeting, and 54 percent odds of a move by year-end, according to data compiled by Bloomberg based on fed fund futures.
Yellen is scheduled to speak on Friday and will use the opportunity to either support or dismiss the perceived hawkish stand that Fed policymakers have taken in recent days. “With markets pricing nearly even odds for another Fed hike this year, and given the retreat in the dollar and the rally in risky and emerging markets, this allows investors to once again ponder their portfolio exposure in the backdrop of subtle shifts in Fed messaging”.
USA stocks were little changed on Monday as a drop in oil prices that weighed on the energy sector was offset by strong gains among biotech stocks. The number of oil rigs in US rose by 10 to 406 last week, according to weekly rig count report.
Brent crude was off 12 cents at US$49.04 a barrel.
Syngenta’s USA -listed shares jumped 11.3 percent after a US national security panel cleared ChemChina’s $43 billion takeover of the Swiss pesticides and seeds group. The state-owned company, also known as ChemChina, said the $43 billion acquisition still requires approval from anti-trust and other regulators in the United States and other countries.
DRUGMAKER MERGER: Cancer drug maker Medivation jumped $13.24, or 20 percent, to $80.40 after pharmaceutical giant Pfizer announced it would buy the company for $14 billion, or $81.50 a share.
The Nasdaq Composite .IXIC was up 18.74 points, or 0.36 percent, at 5,263.34, after hitting an all-time intraday high of 5275.74.
The S&P 500 .SPX was up 6.64 points, or 0.3 percent, at 2,189.28.
In Hong Kong, the Hang Seng index was down 0.27%.
MSCI’s broadest index of Asia-Pacific shares outside Japan.MIAPJ0000PUS added 0.3 percent in slow trade. The yen declined 0.053% to ¥100.239.
In afternoon trade the dollar bought 100.78 yen, up from 100.20 yen in New York Friday and much better than the levels below 100 yen touched in the middle of last week following disappointing economic data.
The euro firmed to $1.1321 as one major bank decided the news had been good enough that the European Central Bank will not need to cut its interest rates any deeper into negative territory, as it had previously expected.
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