Asian stocks were mixed Tuesday after a Federal Reserve board member said there is no rush to raise interest rates, reassuring investors who were anxious that the rate hike could pull share prices lower.
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Apple rose 2.24 percent, giving the S&P 500 its largest boost. The Nasdaq composite lost 56.63 points, or 1.1%, to 5,155.26.
World stock markets and energy prices fell as the United States dollar rose 0.5 per cent. All in all, the adjustment in the demand-supply balance anticipated by the IEA has weighed on oil prices. My take: The weaker-than-expected growth makes more sense alongside today’s corporate profits and economic fundamentals than the unsustainable hot pace of prior months, and the deceleration does make a December policy rate hike more probable than a September one. Those fears were a big reason stocks tumbled in January and early February.
Brent crude futures (Nov.) are trading down -$1.05 at $47.27 per barrel, while WTI is down -$1.14 at $45.15.
FED FACTOR: Markets are on the lookout for what the Federal Reserve might do on interest rates, weighing in various signs of possible economic recovery.
Markets globally were sent into a tailspin after Boston Fed president Eric Rosengren and governor Daniel Tarullo on Friday signalled their openness to a September move.
US RATE FOCUS: The main point of interest in markets at the moment centers on the Fed and when it will raise interest rates again. The four-day slump was the longest in two months. Activist investor Carl Icahn, who bought a stake in Freeport-McMoRan previous year, has pushed the company to spin off its oil and gas business so it can focus on copper mining.
Britain’s annual inflation rate meanwhile held steady last month, giving little indication that the post-Brexit vote collapse in the pound had lifted prices, at least in the immediate aftermath of the referendum. Benchmark 10-year Treasury yields, as well as three-year yields, hit their highest levels since early June.
High valuations are a risk, but they do not mean stocks are likely to fall in the short term, said Brad McMillan, chief investment officer for Commonwealth Financial in Waltham, Massachusetts.
Even Apple’s 2.3 percent gain, after two US carriers reported strong demand for the new iPhones, was not enough to pull up the indexes.
“Falling oil prices and the election is also causing some uncertainty and traders are caught in the middle of a divided Fed”.
CHIP CHIP, HOORAY: Among the few gainers was chipmaker Intersil, which agreed to be bought by Renesas of Japan. Renesas’ offer values the Milpitas, Calif., company at $22.50 a share, or $3.05 billion. Palladium rose over 1 percent at $659.30. Weight Watchers said Winfrey will be part of the committee that names its next CEO.
OTHER ENERGY TRADING: Wholesale gasoline lost 1 cent to $1.38 a gallon.
December gold was down $2.50, or 0.2%, to $1,323.10/oz. Verizon shed $1.31, or 2.5 percent, to $51.26 and AT&T fell 85 cents, or 2.1 percent, to $39.86.
METALS: Gold dipped $1.90 to $1,323.70 an ounce.
CURRENCIES: The dollar fell to 101.82 yen from 101.89 yen while the euro slipped to $1.1234 from $1.1238.
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They are called 1.6 percent and 0.5 percent lower, respectively. “However, the share of economists expecting more than half a percentage point of additional tightening in 2017 fell to 20 percent from 30 percent in the FT’s last survey in July”, the FT reported. Hong Kong’s Hang Seng index gained 0.4 percent to 23,384.87.
