Global Stocks Follow Wall Street Higher on Upbeat Earnings
January 24 2019 - 5:44AM
Dow Jones News
By David Hodari
Global stocks mostly edged higher Thursday, as a relatively
upbeat corporate earnings season so far offset lingering concerns
about the global economy.
The Stoxx Europe 600 was up 0.4% in the opening minutes of
trading. The tech sector was its sharpest gainer, climbing 1.6%, as
semiconductor manufacturer STMicroelectronics rose 8.9% after
releasing its earnings report.
Renault shares reversed early losses to advance 0.8% after the
news that Chief Executive and Chairman Carlos Ghosn resigned
Wednesday night.
Placid trading in Europe followed a similar session in Asia,
where Hong Kong's Hang Seng and the Shanghai Composite Index each
climbed 0.4%, with both indexes paring most of the losses incurred
earlier in the week following weak Chinese growth figures. As in
Europe, the Hong Kong benchmark was buoyed by tech stocks.
Japan's Nikkei benchmark slipped 0.1%, pulling back for a fifth
trading session in the past seven, after the country's
manufacturing purchasing managers index fell to neutral in January,
ending a 2 1/2 -year growth streak. That followed gloomy export
figures the previous day.
U.S. futures pointed to flat opens for the S&P 500, the Dow
Jones Industrial Average and the Nasdaq Composite Index. Wednesday
saw the weakest volumes on the New York Stock Exchange so far in
2019, with investors struggling to navigate a mix of economic and
political forces.
Global equities have endured a choppy week, with Tuesday
bringing the largest one-day fall of the year so far for U.S.
indexes. Fears of sagging global growth have taken the shine off a
cautiously optimistic corporate earnings season.
That said, market participants had relatively soft expectations
for this batch of results, as it would be tough to beat last year's
tax-cut-fueled profits.
The weakest Chinese annual growth figures since 1990, released
Monday, have since been followed by many weakening indicators from
Germany and Japan among other major economic powers.
Adding to that picture were remarks from Kevin Hassett, chairman
of the White House Council of Economic Advisers, that the U.S.
economy may not grow at all in the first quarter if the partial
government shutdown continues.
The latest round of sparring between Democrats and Republicans
came over whether the president's State of the Union address will
take place next week as previously planned. President Trump
eventually said late Wednesday that he wouldn't deliver his State
of the Union address until the shutdown opened and government
reopened.
The yield on 10-year U.S. Treasurys was last 2.736%, down from
2.755% late Wednesday. Yields fall as prices rise. The WSJ Dollar
index, meanwhile, was up 0.2%.
Markets have been largely unperturbed by the longest shutdown in
U.S. history -- it is now entering its 34th day -- but economists
increasingly fear the impasse could stymie first-quarter growth in
the world's largest economy.
Ultimately, it is within the power of central banks around the
world, particularly the Federal Reserve, to extend the business
cycle by adjusting monetary policy accordingly, said Shawn Snyder,
head of investment strategy at Citi Personal Wealth Management.
While markets were awaiting guidance from the European Central
Bank's first meeting of the year, that event was "overshadowed by
China growth and the federal government shutdown, because you're
starting to see GDP estimates being revised down and policy fall
victim to politics. That's unsettling for markets," Mr. Snyder
added.
The ECB was widely expected to leave rates unchanged, although
any remarks on bond-buying and the global economy will be closely
watched. Markets were also awaiting U.S. jobless figures as well as
manufacturing and services data.
The yield on 10-year German government bonds was last at 0.154%,
down from 0.178% late Wednesday.
U.S. markets were also awaiting results from Bristol-Myers
Squibb, American Airlines, and Freeport-McMoRan, with economic
releases on joblessness, manufacturing and services also
expected.
In commodities, Brent crude oil was mostly flat at $61.16 a
barrel.
Write to David Hodari at David.Hodari@dowjones.com
(END) Dow Jones Newswires
January 24, 2019 05:29 ET (10:29 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.