By Joyce Yu
Philadelphia, PA–U.S. stocks opened higher on Monday morning following the absence of monetary policy clues from the annual meeting of global central bankers last week and rise of gasoline prices.
Gasoline surged as flooding from Harvey inundated refining centers along the Texas coast, shutting more than 10 percent of U.S. fuel-making capacity, according to a Bloomberg report. U.S. stock futures pointed higher, as Oppenheimer Chief Strategist John Stoltzfus said broad markets shouldn’t be “dramatically affected.”
The Dow Jones industrial average closed 0.1% higher on Friday, while the S&P 500 drifted up 0.2%. The Nasdaq slipped 0.1%. European markets fell in their morning sessions on Monday while overnight Asian markets ended the sessions mixed.
Driven by gains in financial and information technology stocks, Hong Kong’s Hang Seng index rose through the 28,000-point level for the first time in more than two years. But the advance did not last and the Hang Seng closed at 27,863. China’s Shanghai Composite added 0.9 per cent to finish at a 20-month high.
At the central bankers meeting concluded last week, both Fed chair Janet Yellen and European Central Bank chairman Mario Draghi focused their remarks on regulation and free trade without any major policy announcements.
The sluggish inflation number in developed economies has been a major concern for central bankers as they try to normalize monetary policies.
Victoria Clarke, an economist at Investec told the Financial Times that “The lack of upward momentum in pay growth has been a real talking point.”
“The Fed appears happy to sit tight and move gradually on interest rate normalisation, waiting until December before enacting the next hike, despite the low unemployment rate.”
The latest US monthly jobs figures will be released on Friday. Analysts noted that if Friday’s figures do show an accelerated rate of wage growth it will strengthen the case for the Fed to raise interest rates later this year.
Separately, the third round of Brexit talks begins on Monday. As of now, the two sides haven’t agreed on key issues including the rights of EU citizens living in the U.K. and the future of the border in Ireland.
More economic data coming this week includes:
Monday — Brexit talks resume, U.S. trade data
Tuesday — U.S. consumer confidence report, French GDP data
Wednesday — Second quarter U.S. GDP report (second estimate)
Thursday — Personal income & spending report, Chinese manufacturing PMI, Canada GDP data, India GDP
Friday — U.S. jobs report
