London (AFP) – Wall Street pushed higher on Wednesday ahead of an interest-rate update from the US Federal Reserve, while many of the world’s stock markets were shut for May Day.
New York’s S&P 500 stocks index built on Tuesday’s record highs and the Nasdaq rose after better-than-expected earnings by Apple helped the tech giant’s share price rise up nearly seven percent to its highest level since November.
Dean Popplewell, analyst at Oanda trading group, said that “with most of continental Europe and Asia closed for the May 1 bank holiday, trading ranges have been tightly contained with thin liquidity as we wait for the main event for today — the Federal Open Market Committee (FOMC) monetary policy announcement.”
The Fed opened its second day of policy deliberations on Wednesday, and is widely expected to keep its main interest rate at 2.25-2.5 percent.
But as the Fed kicked off its third meet of the year on Tuesday, US President Donald Trump again slammed it for prior interest rate hikes and reiterated his call for a cut.
Federal Reserve Chairman Jerome Powell faces a conflicting dynamic with data showing the economy continues to grow but with few signs of accelerating wages or inflation.
More conflicting information came on Wednesday, when payroll data was released showing that private hiring surged by 275,000 new positions in April, beating the consensus forecast by more than 100,000.
Mark Zandi, chief economist at Moody’s Analytics, which jointly produces the report, however warned that “April’s job gains overstate the economy’s strength”.
Still “they make the case that expansion continues on,” he added.
Sentiment on Wall Street was also bullish after US and China negotiators said “productive” talks had been held aimed at ending the trade war between the world’s two biggest economies.
– London falling –
London’s benchmark FTSE 100 index fell by 0.4 percent, with a stronger pound weighing on multinational companies who earn vast sums in dollars.
Fresh data on Wednesday showed that Britain’s manufacturing sector slowed last month on Brexit uncertainty.
The Markit/CIPS UK manufacturing purchasing managers’ index (PMI) for April came in at 53.1, down from 55.1 in March.
A figure above 50 indicates growth.
“Volatility has been low as most European markets are closed as it is May Day,” said CMC Markets UK analyst David Madden.
Oil prices fell after claims of an attempted military coup in OPEC-member Venezuela.
O’Hare said the price drop “tells us is that the Venezuelan situation still isn’t a ‘situation’ in the market’s mind”.
– Key figures around 1550 GMT –
New York – Dow: UP 0.3 percent at 26,676.71
London – FTSE 100: DOWN 0.4 percent at 7,385.26 points (close)
Pound/dollar: UP at $1.3089 from $1.3032 at 2100 GMT Tuesday
Euro/pound: DOWN at 85.92 from 86.06 pence
Euro/dollar: UP at $1.1245 from $1.1215
Dollar/yen: DOWN at 111.16 from 111.42
Oil – Brent Crude: DOWN 34 cents at $71.72 per barrel
Oil – West Texas Intermediate: DOWN 74 cents at $63.17
burs-dl/har
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