Global Stocks Muted After S&P 500 Record
11 Juli 2019 - 01:54PM
Dow Jones News
By Nathan Allen
-- S&P 500, Dow futures rise
-- European stocks largely flat after gains in Asia
-- Oil rises as Iran tensions flare
Stocks treaded water Thursday after Federal Reserve Chairman
Jerome Powell hinted at a possible interest-rate cut in July to
support the U.S. economy as global growth slows.
Indexes across Europe were mixed, after the S&P 500 hit 3000
for the first time Wednesday and the Nasdaq Composite closed at a
record high. The pan-continental Stoxx Europe 600 was up 0.2%.
"There's a lot of green this morning but no euphoria," said
Vincent Juvyns, global market strategist at JPM Asset Management.
"After double-digit increases this year, European markets are
perhaps feeling some vertigo."
In the U.S., futures on the S&P 500 and the Dow Jones
Industrial Average were trading 0.2% higher. Futures don't
necessarily predict moves after the market open.
Three Iranian vessels tried to block a BP-run tanker from
passing through the Strait of Hormuz on Wednesday but were turned
away by a British warship, exacerbating tensions in the region and
adding to oil-supply concerns.
Global oil benchmark Brent crude rose 0.5% to $67.35 after
surging to a seven-week high Wednesday.
In the U.K., the Bank of England warned that foreign investment
into commercial real estate and leveraged loans fell sharply in the
first quarter, as the perceived risk of a no-deal Brexit has risen.
Lower investor appetite for U.K. assets risks pushing up interest
rates and slowing the economy, the bank said.
Still, Gov. Mark Carney said the U.K.'s banking system was
sufficiently resilient to withstand a disorderly Brexit and the
economic fallout of rising trade tensions.
The pound gained around 0.4% against the dollar, while the FTSE
100 equity index was flat.
Reckitt Benckiser Group PLC was among the U.K.'s biggest gainers
after the consumer-goods company agreed to pay $1.4 billion to
resolve a U.S. federal investigation into sales and marketing of
Suboxone Film, an opioid-addiction treatment.
Meanwhile, shares of Germany's Deutsche Bank AG fell after The
Wall Street Journal reported the U.S. Justice Department was
investigating whether the lender breached anticorruption laws in
its dealings with Malaysian fund 1MDB.
Asian markets were mostly higher, with Korea's Kospi and Hong
Kong's Hang Seng leading the gains.
The European Central Bank will publish its monetary-policy
meeting report Thursday. Analysts will look for any insights into
whether the ECB will cut rates at its July meeting.
"While we expect a change of forward guidance this month, we
expect the rate cut to be confirmed in September," Daiwa Capital
Markets analysts said in a note to clients.
The yield on 10-year U.S. Treasurys was nearly flat at 2.064%
Thursday, slightly up from 2.061% Wednesday. Bond prices and yields
move in opposite directions.
The WSJ Dollar Index, which measures the currency against a
basket of its peers, dropped 0.2%.
U.S. stocks jumped and the dollar fell Wednesday after Mr.
Powell said in congressional testimony that the economic outlook
hadn't improved in recent weeks and warned that weak inflation
could be more persistent than expected, setting the stage for a
July rate cut.
Equity markets had faltered in recent sessions amid concerns
that investors were overestimating the likelihood of a rate cut.
Mr. Powell's dovish comments and minutes from the Fed's June policy
meeting reassured traders that further easing is the most likely
course of action.
Mr. Powell is due to speak later in front of the Senate Banking
Committee, though analysts don't expect him to provide much new
information. U.S. consumer inflation data will be in focus, as weak
inflation would support the case for further monetary easing.
"Powell needs a low inflation number to bolster the rate-cut
case. If it proves to be just like last week's employment read and
also comes in strong, then perhaps we've all been overeager for a
cut," said Mike Loewengart, head of investment strategy at
E*Trade.
(END) Dow Jones Newswires
July 11, 2019 07:39 ET (11:39 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
FTSE 100
Index Chart
Von Feb 2024 bis Mär 2024
FTSE 100
Index Chart
Von Mär 2023 bis Mär 2024