Global stocks fell overnight as central bank minutes revealed concerns over the economic outlook. Wall Street opened lower this morning.
Three major indices rose after initial rally with the Dow closed above 22,000-milestone at 22,024.87, up 25.88 points or 0.12 percent. S&P 500 and Nasdaq drifted higher 0.14 percent and 0.19 percent respectively.
U.S. stocks opened higher yesterday on weak dollar and subsequently trimmed their gains on U.S. President Donald Trump’s decision to disband two business councils. A number of the council members quit in protest over President Trump’s comments about the violence in Charlottesville. This has weighed on stock valuations.
Naeem Aslam, chief market analyst at Think Markets in London, told Reuters, “Trump dissolving his major business groups makes the investment community even more pessimistic.”
“This calls into question the ability of the Trump administration to get anything done in terms of tax and infrastructure reforms,” said John Doyle, Director of markets at Tempus Consulting in Washington.
Elsewhere, European markets were all slipping in early trading after central bank minutes revealed a wary take on the economic outlook. Major Asian markets ended lower.
U.S. Federal Reserve is equally cautious as its meeting minutes showed worries about low inflation.
According a Reuters’ report, Fed policymakers were ready to roll a plan to shrink its balance sheet but were increasingly wary about weak inflation. Some called for a halt to interest rate hikes.
“Maybe they’re a little more malleable in their views than a lot of people thought,” said Nathan Thooft, head of asset allocation at Manulife Asset Management in Boston. “Risk assets are OK with it becuase they don’t want a shock to the upside on yields.”
On corporate news, earnings of China’s two internet giants are also in focus this week. Tencent Holdings had its revenue growing at the fastest pace in seven years and record profit that surpassed estimates by 35 percent. Its U.S. traded shares went up more than 6 percent, the Reuters reported.
China’s e-commerce operator Alibaba Group will announce its earnings today. Also releasing their quarterly reports today are Walmart and GAP.
