Market Update & Important Indicators
Major U.S. stock index wobbled Wednesday, weighed down by concerns of a pickup in trade tensions. The Dow Jones Industrial Average recently edged higher after paring its gain of roughly 182 points earlier in the session. Stocks slid late in the morning after U.S. Commerce Secretary Wilbur Ross accused Beijing of employing protectionist actions under the guise of free trade. "The Chinese have for quite a little while been superb at free-trade rhetoric and even more superb at highly protectionist activities," Mr. Ross told a trade panel Wednesday in Davos, Switzerland. The comments followed earlier remarks by U.S. Treasury Secretary Steven Mnuchin in Davos that the Trump administration supports "bilateral trade agreements," which steepened the U.S. dollar's decline and added to investors' fears of a possible trade war. The Dow Jones Industrial Average rose 0.2% in recent trading. The S&P 500 was up less than 0.1%, while the Nasdaq Composite slipped 0.4%. Shares of technology companies in the S&P 500 fell 0.6%, making it the broad index's worst-performing sector. The U.S. gold price traded higher again overnight, gaining another 1.3% to finish at 1,357.70 US$/oz.
European stocks broke a four-session winning streak on Wednesday, yanked lower by a rally in the euro after U.S. Treasury Secretary Steven Mnuchin cheered the recent slide in the dollar. The Stoxx Europe 600 index ended down 0.5% at 400.79, falling from its highest close since August 2015 reached on Tuesday. Germany's DAX 30 index fell 1.1% to 13,414.74, losing a grip on its record close from Tuesday. France's CAC 40 index dropped 0.7% to 5,495.16, while the U.K.'s FTSE 100 index lost 1.1% to 7,643.43.
Asian stocks steadied in afternoon trading, with Chinese and Hong Kong equities climbing and Japan trimming its declines as the U.S. dollar rebounded. The broad, strong gains Tuesday – part of this month's global equities rally—were followed by weakness in morning trading. The rally paused after the dollar fell in recent days, and the currency hit fresh three-year lows in Asian trading Wednesday. Meanwhile, Taiwan's Taiex benchmark ended its second eight-session winning streak in the past month with a 0.9% drop Wednesday.
Australian stocks rise for a 2nd day, getting the S&P/ASX 200 to its best level in more than a week despite a late fade. Gains were again broad despite weakness elsewhere in the region, with only the materials sector down amid further declines in Chinese iron-ore futures and a 0.8% drop by CBA bucking a further recover by the country's other major banks. The ASX 200 rose 0.3% to 6054.70 as QBE rallied 5.4% a day after yesterday's profit warning as most analysts viewed the news as a clearing of the decks by its new CEO.
The London Metal Exchange’s 3-month copper contract traded strongly higher overnight, jumping 3.3% to finish at $7,150/t. The other base metals also finished higher amid U.S. Dollar weakness. Aluminium prices bounced 0.9% to 2,246/t, while lead prices added 1.3% to close at 2,639/t. Zinc prices were 0.9% higher at 3,465/t, whilst Tin prices bolstered 2.3% to 20,825/t. Nickel prices were strongest though, rising 5.7% to close at 13,540/t.
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