Global Stocks Waver Amid Hopes for Rate Cut
July 19 2019 - 8:36AM
Dow Jones News
By Nathan Allen
--S&P 500 futures tick higher following mixed trading in
Asia, Europe
--Brent crude gains amid U.S.-Iran tensions over downed
drone
--Microsoft climbs in premarket trading after posting record
revenue
Major stock markets were mixed Friday after a Federal Reserve
official made comments that seemed to strengthen the case for an
interest-rate cut.
S&P 500 futures rose less than 0.1%. Europe's major equity
benchmark wavered between tepid gains and losses, while most major
Asian indexes posted advances.
U.S. stocks closed higher Thursday after New York Fed President
John Williams said central banks must take swift action when faced
with adverse economic conditions, which some investors interpreted
as signaling a 0.5% rate cut in July. However, the bank later said
Mr. Williams didn't intend to signal any specific policy
changes.
The yield on the 10-year Treasury note rose to 2.045% on Friday,
while the 2-year note yield, sensitive to shifting expectations for
Fed policy, ticked up to 1.781%, according to data from FactSet.
The short-term Treasury yields had fallen sharply following those
remarks.
"Given that a 50-basis-point cut would trigger a further rally
in global equities, any remark of dovish nature translates
immediately into higher asset prices," said Ipek Ozkardeskaya, a
senior analyst at London Capital Group.
The WSJ Dollar Index climbed almost 0.3% to 89.90.
Meanwhile, shares in Microsoft were up about 3% in premarket
trading after the world's most valuable public company said late
Thursday that its cloud-computing business drove revenue to a
record in the most-recent quarter. Its profit also beat
expectations.
Friday is poised to be another big day for investors in
financial stocks, with a number of firms including American Express
and State Street reporting second-quarter results. State Street
rose 1.3% in premarket trading minutes after its earnings were
announced. American Express shares edged down 0.3% after it
released its quarterly results.
Investors will also be watching for University of Michigan's
July consumer confidence data. Economists surveyed by The Wall
Street Journal forecast the consumer sentiment index logged in at
99.0 in the beginning of July, up slightly from 98.2 at the end of
June. Such a rise could reduce the likelihood of a large rate cut
by the Fed at the end of the month and provide some support for the
U.S. dollar, Rabobank said.
Meanwhile, global oil benchmark Brent crude rose 1.5%,
rebounding from the month's lows and marking a second day of
volatility in the prices. Iran denied that the U.S. Navy downed one
of its drones in the Strait of Hormuz, following several close
encounters between American warships and the Iranian military on
Thursday in the vital oil shipping route that have further raised
tensions between the nations.
In Europe, the automotive, chemical and food-and-beverage
companies were among gainers on the pan-continental Stoxx Europe
600 index, which was mostly flat following a two-day losing
streak.
France's Publicis Groupe dropped 8.6% after the advertising
giant cut its outlook, prompting a downgrade from analysts at
Liberum.
Brewer Anheuser-Busch InBev was among Europe's biggest gainers,
rising nearly 5% after the Budweiser maker agreed to sell its
Australian subsidiary to Japan's Asahi Group Holdings in an $11.3
billion deal in an effort to pare its debt load.
In Asia, most benchmark gauges traded higher. Hong Kong's Hang
Seng Index rose more than 1%, buoyed by consumer-goods
companies.Japan's Nikkei 225 index climbed 2%.
-- Lauren Almeida contributed to this article
(END) Dow Jones Newswires
July 19, 2019 08:21 ET (12:21 GMT)
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