U.S. Stocks Tick Higher Ahead of Central Bank Meetings
June 17 2019 - 10:18AM
Dow Jones News
By Nathan Allen
U.S. stocks rose in early trading Monday ahead of a series of
central bank policy meetings around the world.
The S&P 500 rose 0.1% Monday. The tech-heavy Nasdaq
Composite advanced about 0.5%. The Dow Jones Industrial Average
fell less than 0.1%.
Investors will be closely watching the Federal Reserve's meeting
concluding Wednesday for clues on whether the central bank will
slash rates this year, after ramping up expectations of an
interest-rate cut in recent weeks. The Bank of Japan and the Bank
of England will also hold meetings this week.
U.S. stocks have rallied in June after Fed Chairman Jerome
Powell said the central bank would act to sustain U.S. economic
expansion in the face of escalating geopolitical and trade
tensions. However, some analysts said investors are overestimating
the likelihood of such a cut given a run of fairly positive
economic data.
"There is a real risk that this week's meeting could puncture a
lot of this rising optimism around multiple rate cuts," said
Michael Hewson, chief market analyst at CMC Markets U.K.
Investors have also been watching for signs of how the U.S.
trade battle with China will ripple over to the domestic economy.
Later Monday, the Office of the U.S. Trade Representative is due to
open seven days of public hearings on the Trump administration's
proposal to raise a 25% levy on $300 billion of Chinese exports,
including consumer goods such as mobile phones and laptops.
In Europe, investors will be focusing on the European Central
Bank's annual forum in Portugal -- roughly equivalent to the Fed's
Jackson Hole Symposium -- where the bank's president Mario Draghi
is due to speak Monday. While not an official monetary-policy
meeting, the ECB has previously used the forum to signal a shift in
approach.
Deutsche Lufthansa AG dragged airline stocks lower in European
trade, countering gains by banks and insurers and leaving the
benchmark Stoxx Europe 600 index slightly lower.
Lufthansa issued its second profit warning of the year, dragging
its shares down more than 12%. Ryanair Holdings PLC, Air France-KLM
and EasyJet PLC all lost more than 3% amid concerns around
overcapacity and deteriorating prices in the European short-haul
market.
Shares in Deutsche Bank rose more than 1.5% after the Financial
Times reported the German lender was considering shifting up to
EUR50 billion ($56 billion) of risky assets to a so-called bad
bank, and may shrink or shut its U.S. equities business amid a
broad shake-up of its trading operations.
In Asia, Hong Kong's Hang Seng gained 0.4% after authorities
indefinitely suspended debating a controversial extradition bill
that had sparked a wave of protests across the city. Global oil
benchmark Brent crude slipped 0.6% to $61.65 a barrel, following a
rebound Friday.
Gunjan Banerji contributed to this article
(END) Dow Jones Newswires
June 17, 2019 10:03 ET (14:03 GMT)
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