Wild ride for US stocks | CMC Markets Daily Commentary
The Dow Jones Industrial Average gyrated through an 841 point range overnight. The swing in sentiment appeared triggerless, and came amid mixed signals from other markets. Bonds and gold rallied, pointing to growth concerns among global investors. However crude oil markets jumped as suppliers moved to the sidelines.
US stocks initially dropped on negative leads from European trading and another negative surprise on initial jobless claims. The first two hours of US trading saw all major indices in the red. The march higher started around mid-session, led by battered financial and energy stocks. Bargain hunting and surging crude oil prices underpinned the gains.
West Texas Intermediate crude oil contracts rose more than 10% after a report showed OPEC cut production by almost 6 million barrels a day in the first two weeks of May. Comments from the International Energy Agency that demand is better than expected pushed the rally along.
Currency markets remain steady. The Japanese yen edged lower, and growth exposed currencies lifted modestly, led by the New Zealand dollar. The Mexican peso rose more than 1.5% after Banco de Mexico cut rates by 0.5%, less than expected.
The swing in market momentum will likely see a positive start to Asia Pacific trading. Data releases could shape the trading day. China industrial production (forecast +1.5%) and retail sales (f/c -6.0%) are expected to show ongoing improvement in the region’s largest economy, and could add to any positive momentum if they land near forecasts.