IFC Markets

US stocks rallied on Monday as higher oil prices and gains in tech stocks buoyed market sentiment despite disappointing manufacturing data from New York state. The dollar weakened on weaker reading of New York manufacturing activity: the live dollar index data indicate the ICE US Dollar Index, a measure of the dollar’s value against a basket of six major currencies, slipped 0.1% to 94.538. The Dow Jones Industrial Average rose 1% to close at 17710.71 led by a 3.7% gain in Apple shares (NASDAQ:AAPL) on a disclosure Warren Buffett’s Berkshire Hathaway (NYSE:BRKa) had bought a roughly $1 billion stake in the iPhone maker during the first quarter.

The S&P 500 closed 0.98% higher at 2066.53. All of the 10 main sectors of the broad market index closed in positive territory, led by 1.6% and 1.4% gains in energy and tech stocks respectively. The Nasdaq Composite Index rallied 1.2% to 4775.46. The broad stock market index rallied despite the first-quarter corporate earnings are on track to record a 7% decline with 91% of companies in the S&P 500 having reported earnings as of May 13. Investor optimism was supported by rising oil prices on Goldman Sachs’ latest revision of the projected oil market oversupply in May into an unexpected deficit. In economic news the Empire State general business conditions index, which measures activity in the New York area, fell unexpectedly to a reading of negative 9 for early May from positive 9.6 in April. The National Association of Home Builders’ index came in at 58 in May, unchanged for the fourth straight month in a row. Today at 14:30 CET April Inflation, Building Permits and Housing Starts will be released. The tentative outlook is positive. At 15:15 CET Industrial Production and Capacity Utilization will be published. The tentative outlook is positive. At 18:25 CET Federal Reserve Bank of San Francisco and Atlanta Presidents John Williams and Dennis Lockhart participate in a Politico panel discussion. And at 19:15 CET Federal Reserve Bank of Dallas President Robert Kaplan will participate in a community forum in Dallas, Texas.

European stocks ended little changed on Monday as higher oil prices lifted energy stocks and helped erase earlier losses on concerns China's growth is slowing after disappointing industrial output, retail sales and fixed-asset income data for April were released in China over the weekend. The euro strengthened, rising to $1.1319 late Monday in New York, compared with $1.1308 late Friday. The Stoxx Europe 600 closed up 0.05%. German stock market was closed for Whit Monday holiday. France's CAC 40 fell 0.2%, UK’s FTSE 100 index gained 0.2%. Tullow Oil (LON:TLW) shares rallied 5% as oil advanced, mining stocks also gained on prospect of more Chinese stimulus with Anglo American (LON:AAL) jumping 5.4%. Today at 10:30 CET April inflation data will be published in UK. The tentative outlook is neutral. At 11:00CET March trade balance will be released in euro-zone. The tentative outlook is positive.

Asian stocks are recovering today with MSCI's broadest index of Asia-Pacific shares outside Japan up 0.8%. Nikkei ended 1.1% higher today at 16652.80 as the US dollar strengthened against the yen, improving the earnings outlook for Japanese exporters.

Oil futures prices are extending gains today as investors adjust the market outlook after revised May estimates of Goldman Sachs (NYSE:GS) and US Energy Information Administration Monday report. EIA report indicated US shale oil output is expected to fall in June by nearly 113000 barrels-per-day (bpd) to 4.85 million bpd as low prices continue to undermine profitability for drillers.