Markets rise as oil edges higher

US stocks closed higher on Wednesday led by gains in energy and banking stocks as oil edged higher. The dollar strengthened after the ADP report showed private sector jobs rose more than expected. The increase of 214000 new jobs in February is higher than January’s upwardly revised 193,000 gain. This points to likelihood of a strong jobs report due on Friday, which will raise expectations of further rate hikes this year. Live dollar index shows the ICE US Dollar index edged up 0.1% to 98.49. The Dow Jones Industrial Average closed 0.2% higher at 16898.70. The S&P 500 rose 0.4% to 1986.36. Eight out of ten main sectors finished in positive territory with energy and financial stocks leading the gainers, up 2.5% and 0.9% respectively. At the same time the Beige Book report, based on anecdotal information from business contacts across US, painted a mixed picture of US economy from January to late February. While US economic activity continued to expand, growth was described as remaining “modest” or “moderate” in six of the twelve districts, down from nine districts in the previous reports. Consumer prices remained steady as wage growth varied considerably from flat to strong. With no rise in inflation it is hard to expect the Federal Reserve will decide to raise the interest rate at its March meeting.
Today at 14:30 CET Initial Jobless Claims and Continuing Claims will be released in US. The tentative outlook is positive. At 16:00 CET February ISM Non-Manufacturing PMI and January Factory Orders will be released. The tentative outlook is positive. And at 16:30 CET Natural Gas Storage Change will be released by the Energy Information Agency.
European stocks closed higher on Wednesday for fifth straight day supported by gains in financial and materials stocks. The euro was little changed trading at $1.0870 late Wednesday compared with $1.0868 late Tuesday. The Stoxx Europe 600 index ended 0.6% higher. Germany’s DAX 30 gained 0.6%, France’s CAC 40 added 0.4% while UK’s FTSE 100 index closed 0.1% lower. Banking shares advanced 3.4% after a remark by ECB executive board member Benoit Coeure that the central bank was aware of concerns that ultra-low rates may put pressure on bank margins.
Today from 09:45 to 10:00 CET final readings of February Services and Composite PMIs for France, Germany and euro-zone will be released. The tentative outlook is neutral. At 10:30 CET February Services and Composite PMIs will be released in UK. The tentative outlook is negative for the Pound. At 11:00 CET January Retail Sales will be released in euro-zone. The tentative outlook is negative.
Asian stocks are rising today ahead of expected announcements of reform measures in China’s five year plan to be voted at National People's Congress. Chinese stocks are edging up today with Shanghai Composite Index up 0.4%. Nikkei rose 1.3% today as yen weakened against dollar on improved market sentiment after Wall Street gains following strong jobs data and advancing oil. Tomorrow at 02:30 CET January Labor Cash earnings will be released in Japan. The tentative outlook is positive.
Oil futures prices are edging higher today after closing up on Wednesday as investors shrugged off the higher than expected increase in US crude stockpiles and focused on the decline in US output. April WTI crude closed 0.8% higher at $34.66 a barrel on the New York Mercantile Exchange. According to Energy Information Administration report crude oil production slipped by 25000 barrels to 9.077 million barrels a day in US while crude stockpiles rose by 10.4 million barrels.