U.S. Stocks Tick Higher Ahead of Central Bank Meetings
June 17 2019 - 11:47AM
Dow Jones News
By Gunjan Banerji and Nathan Allen
U.S. stocks rose Monday ahead of a series of central bank policy
meetings around the world.
The tech-heavy Nasdaq Composite jumped 0.8%, dragged higher by
shares of companies like Facebook and Netflix. The S&P 500 rose
about 0.3%. The Dow Jones Industrial Average advanced 0.2%.
Investors will be 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 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. Now, expectations that central bankers could send a
similar message later this week helped lift markets Monday,
analysts said.
"Investors are thinking that the Fed's going to come out with
some dovish language Wednesday," said Tracie McMillion, head of
global asset allocation at Wells Fargo Investment Institute. "That
would give markets maybe an additional boost."
However, Ms. McMillion cautioned that news from central bankers
globally could spur volatility in stock markets.
Investors have also been watching for signs of how the U.S.
trade battle with China will ripple over to the domestic economy.
On 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 levy on $300 billion of Chinese exports,
including consumer goods such as mobile phones and laptops.
On Monday, the Empire State Manufacturing Survey's general
business conditions index recorded its largest monthly decline on
record. The New York Fed said 30% of respondents reported business
conditions that had worsened from a month earlier.
"It's another signal that the Fed is going to have to take into
consideration," said Shawn Cruz, manager of trader strategy at TD
Ameritrade, of the data.
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.
Shares of Deutsche Lufthansa dragged airline stocks lower in
European trade. Lufthansa issued its second profit warning of the
year, dragging its shares down more than 10%. Ryanair Holdings, Air
France-KLM and EasyJet all fell more than 3% amid concerns around
overcapacity and deteriorating prices in the European short-haul
market.
In Asia, Hong Kong's Hang Seng gained 0.4% as authorities
indefinitely suspended debating a controversial extradition bill
that had sparked a wave of protests across the city. Global oil
benchmark Brent crude slipped 0.2% to $61.91 a barrel, following a
rebound Friday.
Write to Gunjan Banerji at Gunjan.Banerji@wsj.com
(END) Dow Jones Newswires
June 17, 2019 11:32 ET (15:32 GMT)
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