Wall Street Rallies

US equity benchmarks were higher on Monday as traders eyed the release of key manufacturing data due later in the week, the release of minutes from the Federal Reserve’s latest rate-setting meeting and a conference of the world’s largest oil producers to be held on Thursday. In economic news, the latest reading from the closely-watched Chicago Fed National Activity Index pointed toward increased economic growth led by improvements in production-related indicators. The index, seen as a gauge of overall economic activity and related inflationary pressure, posted a reading of +0.49 in April, up from +0.07 in March and surpassing expectations for a gain to just 0.10.

Sentiment was also affected by reports over the weekend that the US and Saudi Defense Ministry had negotiated a package of about $110 billion. And oil prices were extending gains amid hopes that the Organisation of Petroleum Exporting Countries (OPEC), whose members collectively produce approximately one third of global oil supplies, would agree to extend a curb on oil output which has been in place since January.

West Texas Intermediate crude oil, the main US oil benchmark, was 0.9% higher at $51.10 per barrel at the time of writing while Brent crude, the international variety, was up by 0.5% at $53.90 per barrel. Members of OPEC originally agreed to lower oil output for six months by approximately 1.8 million barrels per day, starting on January 1 this year in an effort to lower a global glut in oil and balance prices. Comments made by Saudi Arabia’s energy minister in recent days have indicated that the bloc’s members, who meet in Vienna, Austria on Thursday, may be leaning in favor of extending the output curb by another six-to-nine months.

By Stephen Holmes