Global Stocks Rise, With All Eyes on the Fed
August 23 2019 - 6:01AM
Dow Jones News
By Caitlin Ostroff
-- European, Asian stocks up
-- U.S. stock futures rise
-- Treasury yields tick higher
Global stocks climbed on hopes of clear signals of interest-rate
cuts ahead of a closely watched speech from Federal Reserve
Chairman Jerome Powell later in the day.
The Stoxx Europe 600 gained 0.5% in morning trade after a
broadly positive session in Asia, with the U.K.'s FTSE 100 up 0.7%
and the German DAX up 0.5%.
In the U.S., futures on both the S&P 500 and Dow Jones
Industrial Average were up 0.4%. Futures don't necessarily predict
moves after the opening bell.
Markets will be watching for clarity from Mr. Powell and other
central-bank leaders at the Jackson Hole symposium on the
likelihood of further moves to lift a stagnant global economy.
Lower interest rates would likely drive down bond yields further
and rally equities, said Connor Campbell, a financial analyst for
Spreadex. "They're putting a lot of their eggs in a central-bank
basket," Mr. Campbell said of stock-market investors.
Mr. Powell is set to speak Friday at 10 a.m. ET. Bank of England
Gov. Mark Carney will speak later in the day.
Analysts said the Fed chairman will have to show he is willing
to take strong action to support the economy. Dallas Fed President
Robert Kaplan said Thursday at the gathering of central bankers
that he was open to cutting rates in September.
Though Mr. Kaplan came out in support, other officials were
split. In television interviews Thursday, the head of the Kansas
City Fed and the Philadelphia Fed pushed back against the need for
further rate cuts. The Fed's July rate move lowered its benchmark
rate to a range between 2% and 2.25%.
Friday's rises in stocks came a day after a series of weak
manufacturing data around the world had raised concerns about a
possible recession, weighing on U.S. indexes.
Gains in Europe were led by technology firms, with the sector up
1.3%. Danish IT company SimCorp's shares climbed 5.5% after the
company raised its revenue guidance.
Toronto-based and U.K.-listed Entertainment One's shares jumped
29% after toy maker Hasbro said it would buy it for $4 billion.
The yield on 10-year Treasurys rose to 1.645% on Friday, from
1.613% on Thursday. Bond yields and prices move in opposite
directions.
In currencies, the pound fell 0.3% against the U.S. dollar to
$1.2207. Sterling also fell against the euro by 0.3%.
The WSJ Dollar Index, which measures the currency against a
basket of its peers, ticked up 0.2%.
(END) Dow Jones Newswires
August 23, 2019 05:46 ET (09:46 GMT)
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