Global stock market rallies as North Korea anxieties ebb - 15.8.2017

S&P 500, Dow and Nasdaq advance from last week’s losses

US stocks bounced back on Monday as the tension between the US and North Korea subsided following remarks by top US officials. The dollar regained most of last week’s losses: the live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, gained 0.4% to 93.44. S&P 500 jumped 0.1% settling at 2465.84, led by technology stocks. The Dow Jones industrial average closed up 0.6% at 21993.71, lifted by 1.8% gain in Visa shares. The Nasdaq composite index rose 1.3% closing at 6340.23.

Tensions over North Korea eased after Secretary of Defense Jim Mattis and Secretary of State Rex Tillerson wrote in the Wall Street Journal that President Trump’s administration is seeking diplomatic solutions to reach the goal of a “denuclearized Korean Peninsula.” Treasury yields rose after remark by New York Fed President William Dudley, one of the most influential members of the central bank’s policy-setting committee, he would support an interest-rate hike later this year as financial conditions continue to be easy. Investors sold US bonds, considered haven assets, and rotated back into stocks and other assets perceived as risky. US retail sales will be released today at 14:30 CET, the outlook is positive for dollar.

SP 500

European markets advance as North Korea tensions ease

European stocks recovered on Monday from sharp losses in previous week after US senior officials over the weekend played down the risk of a military conflict with North Korea. Both the euro and British Pound ended lower against the dollar. The Stoxx Europe 600 index rallied 1.1% following 2.7% drop last week. The DAX 30 jumped 1.3% to 12165.12. France’s CAC 40 rose 1.2% and UK’s FTSE 100 added 0.6% to 7353.89. European stock indices opened 0.2% - 0.4% higher today.

Market action was driven by relief as concerns about possible military confrontation between US and North Korea were assuaged after senior US cabinet members indicated US is working on diplomatic solutions for denuclearization of North Korea. Markets shrugged off a European Union statistics agency report industrial production in the euro-zone fell 0.6% in June compared with May, indicating that the region’s economy may be slowing down. Fiat Chrysler Automobiles shares jumped 8.2% on news it received a purchase bid from a well-known Chinese car maker.

Asian stocks rise after Kim Jong Un delays plans to fire missiles

Asian stock indices are higher today after North Korea's leader said he would delay plans to fire a missile near US territory Guam. Nikkei jumped 1.1% to 19753.31 as yen pulled back against the dollar. Exporters Toyota and Nissan Motors rose 1.5% and 1.8% respectively. Chinese stocks are up: both the Shanghai Composite Index and Hong Kong’s Hang Seng Index are 0.4% higher. Australia’s All Ordinaries Index is up 0.4% on upbeat bank earnings and continued slide in Australian dollar against the greenback.

Oil recovering from three week low

Oil futures prices are inching higher today. Prices fell on Monday on the dollar strength and a drop in Chinese refining runs. October Brent crude lost 2.6% settling at $50.73 a barrel on London’s ICE Futures exchange on Monday.