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While you were sleeping: Wall St, dollar gain

Friday 7th April 2017

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Wall Street moved higher, as did the US dollar and oil, as investors eyed the start of a meeting between the leaders of the world’s two largest economies. 
US President Donald Trump and his Chinese counterpart Xi Jinping will begin their closely-watched two-day meeting in Florida, seen as a test about their ability to cooperate.
In the latest sign of a solid US jobs market, a Labour Department report showed that initial claims for state unemployment benefits dropped 25,000 to a seasonally adjusted 234,000 for the week ended April 1. It was the largest decline in almost two years. 
The data followed an ADP Research Institute report on Wednesday, which showed US companies added 263,000 workers in March, well surpassing economists' expectations. 
"The lower jobless claims filings show the economy continues to show improvement which is important news with the long expansion expected to eventually tire somewhere down the line given its longevity," Chris Rupkey, chief economist at MUFG Union Bank in New York, told Reuters.
The government’s nonfarm payrolls data are scheduled for release on Friday. 
In 1.32pm trading in New York, the Dow Jones Industrial Average gained 0.4 percent, while the Nasdaq Composite Index also advanced 0.4 percent. In 1.17pm trading, the Standard & Poor’s 500 Index added 0.3 percent.
The Dow rose, led by gains in shares of Caterpillar and those of Nike, up 2.2 percent and 0.9 percent respectively.
European Central Bank President Mario Draghi reassured investors that the central bank is not looking to tighten its monetary policy any time soon, pushing back against calls including from Bundesbank President Jens Weidmann to end stimulus. 
“I do not see cause to deviate from the indications we have been consistently providing in the introductory statement to our press conferences,” Draghi said in prepared remarks for a speech in Frankfurt.
“Before making any alterations to the components of our stance – interest rates, asset purchases and forward guidance – we still need to build sufficient confidence that inflation will indeed converge to our aim over a medium-term horizon, and will remain there even in less supportive monetary policy conditions,” Draghi noted.
In Europe, the Stoxx 600 Index ended the day with a 0.2 percent gain from the previous close. Germany’s DAX Index rose 0.1 percent, while France’s CAC40 Index gained 0.6 percent.
The UK’s FTSE 100 Index slid 0.4 percent.
Shares of Unilever, which spurned Kraft Heinz’s US$143 billion takeover attempt, rose after the Anglo-Dutch company said it’s reviewing its dual-headed structure and plans to divest its Spreads business.
Unilever also plans to combine its Foods and Refreshments units and buy back 5 billion euros (US$5.3 billion) of its shares, it said in a statement. 
"We will look to increase our strategic flexibility for further portfolio optimisation through a review of the dual-headed legal structure, with a view to simplifying it,” CEO Paul Polman said in a statement. 
Shares of Unilever NV closed 1 percent higher in Amsterdam, as did Unilever Plc shares in London. 
“Will London win, or Rotterdam?” Joost van Beek, an analyst at Theodoor Gilissen Bankiers, told Bloomberg. “They could pick the UK, benefiting from a lower pound as a result of Brexit. On the other hand, with all the R&D efforts here it would be very important for a company like Unilever to stay active in the Netherlands.”
Van Beek rates Unilever shares “buy.’’
"They're not stretching here, and nor should they," GAM fund manager Ali Miremadi, who manages two worldwide equity funds that are 2.5 percent invested in Unilever, told Reuters. “They're in a very strong position and this is hopefully a sign they're going to be a bit leaner and more shareholder-focused.”

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