Advanced Search

Share Coverage



Category: Stockmarket / Currency / Futures / Markets

US shares creep higher on upbeat Fed comments

Tuesday, 20 Dec 2016 05:51:52 | Sue Lannin

US stocks edged higher on a speech by Fed chair Jenet Yellen, despite unsettling geopolitical events overnight. (Brendan McDermid,file photo: Reuters)

A speech by the head of the US central bank on the strength of the North American employment market boosted US stocks although they ended off their highs after attacks in Turkey and Germany.

Markets at 8:30am (AEDT):

  • ASX SPI 200 futures -0.2pc to 5,516
  • AUD: 72.48 US cents, 58.45 British pence, 84.92 Japanese yen, 9.70 euro cents, $NZ1.0447
  • US: S&P 500 +0.2pc to 2,263, Dow Jones +0.2pc to 19,883, Nasdaq +0.37pc to 5,457
  • Europe: Euro Stoxx -0.01pc to 348, FTSE +0.08pc to 7,017, DAX +0.2pc to 11,427
  • Commodities: Gold +0.43pc to $US1,138.90/ounce, Brent crude oil -0.87pc to $US54.73/barrel, iron ore
  • -$US0.27 to $US81.22/tonne

The Dow Jones Index advanced towards 20,000 as the rally after the election of Donald Trump showed no signs of abating, despite uncertainty about whether his infrastructure spending and deregulation plans will get through Congress.

The Nasdaq Composite Index neared a record high, boosted by technology giants Microsoft, Apple and Amazon.com.

In a speech at a graduation ceremony at the University of Baltimore, Federal Reserve chair Janet Yellen said the US jobs market was the strongest in nearly a decade and there were indications that wage growth has picked up.

However, Dr Yellen said the US economy still faced challenges.

"The economy is growing more slowly than in past recoveries and productivity growth, which is a major influence on wages, has been disappointing," she said.

Mrs Yellen also said changing technologies and globalisation have made college and graduate degrees a key to economic success.

"Those with a college degree are more likely to find a job, keep a job, have higher job satisfaction and earn a higher salary," the Fed chair added.

The greenback picked up after Mrs Yellen's speech.

It had fallen after the Russian ambassador to Turkey was shot and killed as he a gave a speech in an art gallery in the Turkish capital Ankara.

The Turkish lira increased its losses against the greenback.

Spot gold rose on the geopolitical tensions.

Italian bank jitters dent many European markets

European stocks were mixed amid worries about Italian banks.

Italy's third biggest lender Banca Monte dei Paschi di Siena lost 11 per cent after the country's bank rescue fund, Atlante, said it was worried about a 1.5 billion euro loan which is part of a rescue plan for the lender.

Quaestio Capital Management, which manages Atlante, expressed strong reservations about the loan.

Monte dei Paschi said it was "actively in contact with Quaestio in order to identify possible solutions."

But it warned that if it did not reach an agreement with Quaestio then it would not meet the European Central Bank's end of December deadline to raise money.

The bank needs to raise 5 billion euros by the end of the year to avoid a state bailout.

Italy's banks have 300 billion euros in bad debts.

The Australian dollar lost ground against the greenback overnight, despite Australia's AAA credit rating being reaffirmed by global credit rating agencies.

The Federal Government's mid-year update revealed a more than $10 billion blowout in the budget deficit, although the Government has promised to return the budget to surplus by the end of the 2021 financial year.

In a note, ANZ economists said more spending cuts were needed to avoid a credit downgrade, although the AAA credit rating is likely to remain in place until next year's budget.

"With yesterday's MYEFO (Mid-Year Economic and Fiscal Outlook), the Australian Government succeeded in convincing ratings agencies it was on track to deliver a more sustainable fiscal path for the country," they wrote.

"Though we think that what was delivered merely buys more time - the Government has hit base camp on a slow ascent of Everest.

"Looking ahead, the hard work is just beginning. Passing of key legislation ahead of the May 2017-18 budget will be critical if Australia is to maintain its AAA credit rating."

AustraliaPlus


 

Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.

沪公网安备 31010602000204号

Email this to your friend