The S&P500 closed broadly flat, near record levels. Oil reversed recent gains, falling 3.7% (its biggest decline in a month) leading the Energy sector to fall over 2%, but Technology and Semiconductor shares rallied to lead the market to a flat close overall.
Oil was negatively affected by rumours of Russia postponing production cuts for a month and other stories indicating supply has been cut less than expected.
Minutes of the June meeting of the Federal Reserve Open Market Committee (FOMC) were released yesterday. This suggested a balanced split among members as to the pace of future interest rate rises, but was clear in their opinion that recent weakness in inflation reflects temporary factors that will have “little bearing on inflation over the medium-run”. There was little movement in debt, equity markets or the US dollar following the release.
Europe broadly followed the US lead with little movement overall in a relatively quiet trading period. Positive moves in retailers and financials offset losses in energy shares.
Key economic statistics from Europe released yesterday were supportive. The latest Purchasing Manager’s Index (PMI: a regular survey of sentiment among purchasing managers across industries) for the services sector in the Euro Area was revised slightly up – thanks to the ongoing recovery in France – and is consistent with continued recovering GDP growth across the Euro region (implied Q2 growth quarter on quarter of 0.8% - source: Deutsche Bank).
Modest losses in Asia in relatively quiet trading sessions.