US stocks pullback persists


All three main US stock indices slip

US stock indices retreated on Thursday led by healthcare, materials and telecom shares. The dollar rebounded: 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 0.3% higher at 93.683. Dow Jones industrial average slipped 0.3% to 24508.66. The S&P 500 fell 0.4% to 2652.01. The Nasdaq composite lost 0.3% to 6856.53.

Positive data were shrugged off as uncertainty about Trump’s tax bill passage persisted. As House and Senate continued work ironing out tax bill differences, reports indicate the corporate alternative minimum tax is repealed and the bill will include a corporate rate of 21% and a top individual rate of 37%. Retail sales climbed 0.8% in November, more than expected. Jobless claims fell 11 thousand and US import prices rose 0.7% in November. At the same time the flash US manufacturing PMI rose to 55 from 53.9 in November, but the flash US services activity index fell to 52.4 from 54.5. Readings above 50 indicate expanding activities.

Euro slips on lower ECB inflation forecast

European markets extended losses on Thursday despite expanding business activities in euro-zone. The euro extended losses against the dollar while British Pound continued advancing. The Stoxx Europe 600 index fell 0.5%. Germany’s DAX 30 lost 0.4% to 13068.08. France’s CAC 40 dropped 0.8% and UK’s FTSE 100 ended 0.7% lower at 7448.12. Indices opened 0.1%-0.4% lower today.

Euro weakened after the European Central Bank’s 2020 inflation forecast of 1.7% was lower than expectations of 1.8% as the ECB left the rate unchanged. The Bank of England held its key rate at 0.5%, as expected, and the Swiss National Bank left its deposit rate at minus 0.75%. Bank shares fell on lower inflation outlook suggesting the ECB might not start raising interest rates in the first half of 2019. In economic news Markit’s flash composite purchasing managers index for the euro-zone came in at 58.0, the highest since February 2011, and the manufacturing PMI rose to a record of 60.6.

Asian indices extend losses

Asian stock indices are lower tracking Wall Street overnight. Nikkei fell 0.7% to 22538.86 on continued yen strength against the dollar. Chinese stocks are falling: the Shanghai Composite Index is 0.3% lower and Hong Kong’s Hang Seng Index is down 1.1%. Australia’s All Ordinaries Index is 0.2% lower with Australian dollar rally against the greenback intact.


Oil up on North Sea pipeline outage

Oil futures prices are edging higher today lifted by the Forties pipeline outage in the North Sea. Prices rose yesterday after multinational chemicals group Ineos said it is too early to say how long the repairs to the pipeline will take to complete. Brent for February settlement rose 1.4% to end the session at $63.31 a barrel on Thursday.


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