Nasdaq hits fresh record high despite weaker US data

Friday, April 24, 2015

The Nasdaq composite index finally surpassed the high seen in March 2000 as increasing risk appetite spurred the index 0.41% higher in a record session for technology stocks. Despite the release of less than impressive US macro data yesterday – with initial weekly jobless claims rising by 295K during the week ending April 18th against expectations of 287K additional claims and the Kansas City Fed manufacturing activity index slipping further lower in April to -7 from -4 the previous month – stocks on Wall Street were buoyed by a weaker USD. The dollar index lost 0.76% against a basket of major currencies yesterday, falling back to test support at the 50 day MA around 97.145 as investors speculated that the weaker than expected data would prompt the Fed to keep monetary policy loose for a little while longer. Activity this morning has seen the DXY pull back towards 97.050, notably losing territory against the euro as hopes that Greece can make progress in securing funding helped push the single currency above 1.0870 this morning.

Front month Brent futures remain tentatively on track to post gains for a third straight week as investors shift focus away from the bearish fundamental outlook after tensions rising in the Middle East on Saudi led airstrikes in Yemen heighten investor concerns of a potential spill over to neighbouring nations. Provided Brent contracts can hold onto the modest gains accrued this week, the global benchmark is on track to push almost 2% higher, posting gains for five out of the last six weeks. Having rebounded over 43% since reaching a fresh multi-year low in January some market participants are wary that the recent rally may be overbought but for now while airstrikes continue to hit Yemen we anticipate prices will continue higher before the fundamentals switch back into focus.  

Yesterday Chinese officials announced that they would be scrapping the export tax on rare earths in an effort to boost demand and help kick start industrial activity. Producing as much as 85% of the world’s supply of rare earth elements, Chinese officials had imposed export quotas and tariffs for the past 15 years in an effort to consolidate the sector and build up strategic reserves at relatively cheap prices. However, after the World Trade Organization ruled that the policy violated trade rules the Ministry of Finance announced that export tariffs would be removed in May following the removal of quotas in January.

Nasdaq closes at record high

CCMP Index NASDAQ Composite Ind 2015 04 24 07 39 14

Weaker data pushed DXY lower

DXY Curncy DOLLAR INDEX SPOT 2015 04 24 07 43 19

Brent futures on track to post third straight week of gains

CO1 Comdty Generic 1St CO Fut 2015 04 24 07 53 40

Events for today

0900

DE

Apr

IFO Business Climate

1330

US

Mar

Durable Gds & New Orders

OE:

May Natural Gas (NYMEX) 

Copper, Gold, Silver (COMEX) 

FN:

May Crude WTI (NYMEX) 

All times UK Local Time 

 

Topics: Crude oil, Brent, EUR, DXY
More from: Kash Kamal