Stocks rebound amid unresolved Middle East tensions - 7.1.2020

Dollar strengthening resumes

US stock market recovered part of previous session losses on Monday amid unresolved concerns about possible Iranian retaliation after US airstrike killed top Iranian commander in Iraq. The S&P 500 advanced 0.4% to 3246.28. Dow Jones industrial added 0.2% to 28703.38 . The Nasdaq rose 0.6% to 9071.46. The dollar strengthening reversed despite Markit report US Composite PMI was revised higher to 52.7 from a preliminary of 52.2 in December of 2019. 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, lost 0.3% to 96.62 but is higher currently. Futures on stock indexes point to higher openings today.

European indexes retreated despite positive data

European stocks retreat continued on Monday despite Markit report euro-zone business activity expanded in December. Both the EUR/USD and GBP/USD reversed their declines yesterday with dynamics reversed currently for both pairs. The Stoxx Europe 600 index lost 0.5% led by travel and auto shares. The DAX 30 fell 0.7% to 13126.99. France’s CAC 40 slid 0.5% while UK’s FTSE 100 retreated 0.6% to 7575.34 despite report UK services PMI inched up to the 50 mark which separates growth from contraction.

Nikkei leads Asian Indexes recovery

Asian stock indices are mostly higher today. Nikkei rebounded 1.6% to 23575.72 as yen slowed its slide against the dollar. Markets in China are recovering: the Shanghai Composite Index is up 0.7% while Hong Kong’s Hang Seng Index is 0.6% higher. Australia’s All Ordinaries Index extended gains 1.4% as Australian dollar reversed its climb against the greenback.

Saudi Aramco shares fall as Brent falls

Brent futures prices are edging lower today. Prices ended higher yesterday: February Brent crude closed 0.5% higher at $68.91 a barrel on Monday. Saudi Aramco ‘s shares continue trading on the country’s Tadawul exchange. Shares fell 1.7% on Sunday, followed by 1.2% decline on Monday against the background of heightened tensions between the US and Iran. After Aramco became the first company to hit a $2 trillion valuation on December 12, its market value has fallen by $200 billion since its mid-December peak. Shares are currently at 34.35 riyals, 7.3% higher than its offering price of 32 riyals ($8.53).

Gold up despite higher Dollar

Gold prices are edging higher today. Gold prices ended at near seven month high on Monday: February gold added 1.1% on Monday.