US MARKET WRAP: Stocks indices register fresh record highs (again)

Stock indices were struggling to add to Tuesday’s record highs but managed to go positive in late trade, registering fresh closing highs. Energy names were leading gains, tracking the rise in crude prices following reports from the IEA, weekly inventory data, as well as OPEC-speak.  

Apple again weighed on the tech sector following its product launch on Tuesday, while Western Digital was among the worst performers after JV partner Toshiba signed an agreement overnight to sell its chip unit to a South Korean consortium.

S&P 500 +0.07% at 2,498.24; DJIA +0.17% at 22,156.39; NDX +0.15% at 6,004.38
Top-Performing Sectors: 
Energy +1.23%; Cons. Disc. +0.72%; Telecoms +0.75%
Bottom-Performing Sectors: Utilities -0.52%; Healthcare -0.39%; IT -0.18%

The Dollar Index is higher as risk aversion eases, with the Yen and Swissy giving back some of their recent gains. And despite gains for crude, commodity FX succumbed to the strength of the greenback.

The Euro was generally softer on dollar strength, though comments from the ECB’s Benoit Coeure contributed; Coeure suggested that external shocks to the FX rate could lead to an unwarranted tightening of financial conditions, which would have negative implications for inflation. 

There wasn’t much of a reaction after the comments from the ECB’s Peter Praet, who claimed that although the threat of deflation had disappeared, it was too soon to claim victory on inflation, and policy must be kept steady. 

The pound was lower against the buck ahead of Thursday’s BOE meeting with some profit-taking being cited; some were also concerned that weak-wage growth data will keep the MPC hawks at bay. 

Treasury yields were modestly higher throughout the session, though did ease slightly after a lackluster auction of 30-year bonds, which tailed by 0.3bps. US 10-Year Tsy Futs (Dec) settled 6 ticks lower at 126-14+.

Weekly DOE data showed crude stocks rising by 5.9mln bbls, more than analysts had expected, while output is starting to normalise as refineries return after recent hurricanes (output rose to 9.4mln bbls from 8.8mln). But with that said, analysts were happy to look through the data, given the hurricane-related distortions. 

On the policymaker front, Nigeria today announced that it would be willing to join the supply cut deal once production levels had sustainably stabilised around 1.8mln BPD. However, that would be unlikely in March, given the energy minister's forecast that the country would pump between 1.6mln and 1.7mln BPD in 2018.

Elsewhere, the monthly IEA report suggested global oil stocks were running down on robust demand, and raised its 2017 global oil demand growth forecast to 1.6mln BPD (from 1.5mln).

WTI futures settled $1.07 higher at $49.30/bbl, while Brent settled settles 89 cents higher at $55.16/bbl

13 Sep 2017 - 21:00- Research Sheet- Source: RANsquawk

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