US stocks advanced on Tuesday as risk appetite was boosted by higher than expected new home sales data. 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, ended little changed at 94.494. The Dow Jones industrial average rose 0.1% to 18547.30 led by 1.6% and 1.1% rise in Nike and Cisco shares respectively. The S&P 500 advanced 0.2% to 2186.90 with eight out of ten main sectors closing in positive territory led by a 0.8% climb in materials shares. The Nasdaq index gained 0.3% to 5260.08, closing just about two points below of its all-time closing high of 5262.02 set on August 15. US new home sales jumped to the highest level in nearly eight years in July, rising 12.4% instead of expected 2% decline. The positive surprise was particularly welcome after disappointing retail sales report last Friday, spurring hopes strong consumption may boost economic growth while business investment is weakening. In other economic news flash manufacturing purchasing managers index from Markit came in weaker than expected, falling to 52.1 this month from 52.9 in July. Today at 13:00 CET Mortgage applications will be released by the Mortgage Bankers’ Associations in US. At 15:00 CET June House Price Index will be released by Federal Housing Finance Agency. The tentative outlook is positive. AT 16:00 CET July Existing Home Sales will be published. The tentative outlook is neutral.
European stocks extended gains on Tuesday supported by advances in mining and financial shares as well as strong economic data. . The euro weakened and British Pound strengthened against the dollar. The Stoxx Europe 600 index rose 0.9%. Mining giant BHP Billiton PLC was among top gainers as shares rallied 4.4% after a ratings upgrade to buy from hold by Jefferies investment bank. Higher preliminary composite purchasing managers index in euro-zone for August alleviated concerns that euro-zone’s economic recovery slowed after the UK vote in June to leave the European Union. Markit reported Composite PMI rose to 53.3 from 53.2 in July. A reading above 50 indicates an expansion. The manufacturing PMI declined to 51.8 in August from 52, but the Services PMI rose to 53.1 from 52.8 in July. Germany’s DAX 30 advanced 0.9% to 10592.88 helped by a 2.4% jump in Volkswagen shares after the German auto maker said it’s resolved a dispute with suppliers that led to a halt of parts deliveries. France’s CAC 40 gained 0.7% and UK’s FTSE 100 added 0.6% lower. Today second quarter final GDP came out unchanged at 0.4% over quarter in Germany. At 10:30 CET July Loans for House Purchases will be released by British Banker’s Association in UK. The tentative outlook is negative for Pound.
Asian stocks are mixed today with Chinese stocks retreating on diminishing expectations of further aggressive monetary easing after China's central bank injected cash into money markets through 14-day reverse repurchase agreements for the first time since February. Shanghai Composite Index is 0.13% lower and Hong Kong’s Hang Seng index is 1.2% down, while Australia’s All Ordinaries Index is up 0.11%. Nikkei ended 0.6% higher today at 16597.30 as yen weakened against the dollar lifting cyclical stocks.
Oil futures prices are edging lower today after the industry group American Petroleum Institute reported late Tuesday an increase of 4.5 million barrels in US crude stockpiles last week. Prices ended higher yesterday on speculation that Iran might cooperate with other global exporters to freeze output. October Brent crude rose 1.6% to $49.96 a barrel on London’s ICE Futures exchange on Tuesday. Today at 16:30 CET US Crude Oil Inventories will be released by the Energy Information Administration.
Gold is stable today as investors await Fed chair Janet Yellen’s speech at central bankers meeting in Jackson Hole, Wyoming on Friday August 26. The safe haven metal declined 0.1% on Tuesday on uncertainties surrounding interest rate hike timing.
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