Global Stocks Rise as Investors Set Aside Trade Fears
September 20 2018 - 6:02AM
Dow Jones News
By Georgi Kantchev
Global stocks inched higher Thursday as investors continued to
parse the latest signals on international trade.
The Stoxx Europe 600 was up 0.2% in early morning trade,
following a mixed session in Asia. In the U.S., futures pointed to
a 0.1% opening gain for the S&P 500.
Rising frictions in global trade have rocked markets this year,
with the U.S. and China imposing a new round of tariffs this week.
The introduction of the latest U.S. levies on Chinese imports,
however, will be staggered, with some investors expressing hope
that there is still time for negotiations to avert a full-blown
trade war between the world's two biggest economies.
Investors were also monitoring talks between the U.S. and Canada
on the future of the North American Free Trade Agreement.
Despite the trade tensions, the U.S. stock market has been
resilient, with the S&P 500 just 0.2% off its all-time high hit
on Aug. 29, amid strong corporate earnings and robust economic
data.
"The fundamental backdrop continues to be very solid but I won't
be surprised to see more anxiousness in the market as trade
continues to be an issue," said Eric Wiegand, senior portfolio
manager at U.S. Bank Wealth Management. "Any headlines about
dialogue between trading partners help sentiment."
Economists are also trying to gauge the impact trade frictions
would have on the global economy.
Citigroup said in a report to clients that a worsening trade
environment represents "a material risk to growth into 2019." The
bank lowered its forecast for global growth this year to 3.3%, the
first downward revision since October 2017, with the same rate
expected next year.
Investors are looking to next week's Federal Reserve meeting,
with most expecting the U.S. central bank to raise interest rates.
The market currently sees a 94% chance of a rate rise at the
meeting, according to Fed-fund futures tracked by CME Group.
Traders were also eyeing the central bank's projected path for
2019.
The 10-year U.S. Treasury yield fell to 3.066%, compared with
3.081% on Wednesday, its highest close since late May. Yields move
inversely to prices.
The WSJ Dollar Index, which tracks the dollar against a basket
of 16 currencies, was down 0.2%.
Investors continued to monitor developments in Turkey, where
Finance Minister Berat Albayrak Thursday announced lower growth
projections and pledged to focus government action on savings,
following a 40% plunge in the lira this year. The currency was last
up 0.7% against the dollar.
In Asia, Japan's Nikkei Stock Average finished flat while Hong
Kong's Hang Seng was up 0.3%.
In commodities, Brent crude, the global oil price benchmark, was
up 0.3% while gold was down 0.1%.
Write to Georgi Kantchev at georgi.kantchev@wsj.com
(END) Dow Jones Newswires
September 20, 2018 05:47 ET (09:47 GMT)
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