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U.S. Equities Gain With Europe as Pound Advances: Markets Wrap

14 March 2019

For most people who know Britain, it is hard to believe that the British Parliament could ask the British people to vote on whether to leave the European Union, then refuse to implement the democratic instruction of the people. U.S. producer prices barely rose in February, the U.S. Labor Department reported on Wednesday, resulting in the smallest annual increase in more than 1-1/2 years. The non-binding vote will increase pressure on Prime Minister Theresa May to rule out a "no-deal" exit, and paves the way for a vote to delay Brexit.

Japan's Nikkei rose 0.5 percent while Australian and New Zealand shares each added 0.2 percent.

The grounding gives Boeing time to address any problems and not face another potential disaster, said Tim Ghriskey, chief investment strategist at Inverness Counsel in NY.

"Earnings estimate revisions continue to come downward, but that does not seem for the moment to be fazing equity investors", he said.

A Fed on hold for hiking rates suggests concern about economic growth, which can be seen in a narrowing gap between 10-year and two-year US Treasury yields, Geraghty said. The 10-year Treasury yield slumped, and crude oil rose after Saudi Arabia was said to extend deep supply cuts.

USA stocks rose on Wednesday, led by gains in healthcare shares, and Boeing shares edged upward even as the United States grounded the company's 737 MAX jets after a fatal crash in Ethiopia.

On Wall Street, the Dow Jones Industrial Average rose 148.23 points, or 0.58 percent, to 25,702.89.

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The S&P 500 Index rose 0.7 percent as of the close of trade in NY.

The dollar index, tracking it against six major peers, fell 0.15 percent and the euro rose 0.15 percent to $1.1303. The pound jumped as the United Kingdom parliament voted to reject a no-deal Brexit.

In late NY trading, the euro was up to 1.1329 USA dollars from 1.1296 dollars in the previous session, and the British pound rose to 1.3217 dollars from 1.3084 dollars in the previous session. The dollar was 0.19 lower versus the Japanese yen at 111.19. "So some of these are just rebound after that", said Stan Shipley, fixed income strategist at Evercore ISI in NY.

Oil prices rose more than 1 percent, supported by an unexpected drop in USA crude inventory along with a forecast of slower-than-expected supply from the world's top crude producer. The price of oil, one of Canada's major exports, rose as USA crude inventories unexpectedly fell and an official forecast of crude oil supply growth from the world's top producer was revised lower. West Texas oil was boosted by a decline in USA crude and fuel stockpiles added to evidence of a tightening market.

USD/JPY: The U.S. dollar dipped against the yen on Wednesday, as tepid U.S. economic data reinforced views the Federal Reserve would be patient on monetary policy.

Gold climbed 0.7 percent to $1,311.06 an ounce, the highest in nearly two weeks.

U.S. Equities Gain With Europe as Pound Advances: Markets Wrap