Global market: US stocks edge higher ahead of US inflation data release

Global market update: US stock market edged higher on Friday on resilience in the national economy even though investors await the key US inflation data expected next week. Dow Jones index added 0.22 per cent whereas tech heavy weight Nasdaq added 0.09 per cent. S&P 500 index gained 0.14 per cent. However, Small-cap 2000 index lost 0.23 per cent.

Wall Street majors Apple share price added 0.35 per cent, snapping its two days losing streak. Apple share price opened at $178.35 apiece and went on to hit intraday high of $180.24 per share. However, the tech major ended at $178.18 levels on Friday, 0.35 per cent higher from its Thursday close of $177.56 per share. Apple had fallen in the last two sessions on news reports of China curbing iPhone use by state employees.

Speaking on global market, especially on the US stock market, Quincy Krosby, chief global strategist at LPL Financial in Charlotte, North Carolina said, “The dollar has been higher on the back of obviously stronger U.S. data …, suggesting that the Fed perhaps has another rate hike before the end of the year.”

US dollar climbs to six-month high

The US dollar index registered an eighth straight week of gains on Friday while global stock indexes ended slightly higher on the day ahead of key US inflation data next week. The dollar index’s weekly winning streak was its longest since 2014, bolstered by recent data suggesting the US economy is still resilient. For the day, the index was nearly flat at 105.08.

In contrast, China’s onshore yuan ended its domestic session at its weakest since 2007 amid concern about China’s slowing economy.

Strong US economic data this week have left some investors worried that even if the Federal Reserve leaves rates unchanged this month, they could remain high for longer than anticipated.

On why US dollar is skyrockleting, Sugandha Sachdeva, Executive Director & Chief Strategist at Acme Investment Advisors said, “The resilient US economy, as reflected in positive economic data, has driven the dollar index to a six-month peak,” adding, “The acceleration of US services activity in August, coupled with a more-than-expected decline in jobless claims, has led to increased speculation about the possibility of another rate hike by the US central bank before the end of the year in an attempt to bring down inflation to their 2 per cent target.”

Investors are waiting for the US Consumer Price Index reading for August, due Wednesday, especially with oil prices rising.

The pan-European STOXX 600 index was up 0.2 per cent, breaking a seven-day string of losses, while MSCI’s gauge of stocks across the globe gained 0.01 per cent.

Dollar gains have also prompted a step up in rhetoric from Japanese policymakers growing uncomfortable with the yen’s slide.

Japan’s top currency diplomat Masato Kanda said this week authorities will not rule out any option to clamp down on “speculative” moves, while chief cabinet secretary Hirokazu Matsuno said the government was watching with “urgency.”

The Japanese yen was last at about 147.82 per dollar and on the weaker side of the key 145-level that prompted Japan intervention last year.

Longer-dated U.S. Treasury yields slipped as investors digested recent comments from several Fed officials, including some comments that underpinned the view the U.S. central bank may be able to pause in its rate hike cycle.

The yield on the benchmark U.S. 10-year Treasury note shed 1 basis point to 4.256%. The 10-year yield is up about 9 basis points for the week.

(With inputs from Reuters)

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Updated: 09 Sep 2023, 09:19 AM IST

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