European equities struggled for traction on Friday, with Adidas
a standout gainer, while U.S. stock futures indicated a mostly
higher start as investors continued to cheer news that President
Joe Biden had reached an infrastructure agreement with bipartisan
In Europe, data showed German consumer sentiment is forecast to
rise in July as the Covid-19 pandemic retreats and the economy
reopens, according to data from the market-research group GfK
A top gainer on the Stoxx 600 was adidas with shares up more
than 5% after U.S. rival sportswear maker Nike topped Wall Street
revenue estimates by more than $1 billion in its fiscal
fourth-quarter, in contrast to deep losses a year ago. Elsewhere,
shares of JD Sports Fashion climbed near 4%.
Most airlines and travel stocks were slipping even after the
U.K. government added Malta, Madeira, Spain's Balearics and some
Caribbean nations to the so-called "green list" of places that
won't require travelers to quarantine upon returning home, as long
as they test negative before returning and once they arrive.
Ministers also said they may drop quarantine rules for fully
vaccinated travelers returning home from countries on an amber
list, with details to be announced next month.
But some European leaders reportedly said they planned to follow
the advice of German Chancellor Angela Merkel and tighten up
borders to keep out the highly contagious delta variant of COVID-19
that has spread across the U.K.
Shares of InterContinental Hotels Group, travel group TUI,
cruise company Carnival and International Consolidated Airlines all
dropped close to 2% each. Shares of cut-rate airline easyJet fell
Shares of pharmaceuticals were also weighing on the downside,
with shares of Novartis, AstraZeneca, and Novo Nordisk all edged
Auto makers were also under pressure, with Renault down 2% and
Daimler off more than 1%.
Stock futures edged higher, putting the S&P 500 on track to
close out its best week in more than two months amid renewed
confidence in the global economic expansion.
Stocks have bounced back, pushing the S&P 500 up 2.4%
through Thursday, after stumbling when the Federal Reserve signaled
a more hawkish stance on rising inflation last week. Fueling the
gains, investors say, are data signaling a fresh acceleration in
the world economy coupled with the prospect of additional
government spending in the U.S. and Europe.
"We are still in a phase where we're seeing the activity data
still accelerate," said Hani Redha, a fund manager at PineBridge
Investments, pointing to surveys showing eurozone business activity
is growing at the fastest pace in 15 years.
"It is natural that you'll see very mini wobbles [in stocks]
from time to time," Mr. Redha added. "But the fundamental
support-that things are improving and the numbers are getting
better-is going to dominate that."
Adding to investors' optimism about the economy, President Biden
and a group of 10 centrist senators agreed to a roughly $1 trillion
infrastructure plan Thursday. With a total of $973 billion of
investment over five years, the deal will make new investments in
the electrical grid, transit, roads and bridges and other forms of
Investors will seek to glean new details on the pace of the
economic recovery from data on consumer spending, due to be
published at 8:30 a.m. ET.
Economists expect the numbers to show spending rose in May,
after a 0.5% increase in April.
Some investors worry that the speedy pace of inflation will
prompt the Federal Reserve to withdraw some of the stimulus it has
lavished on markets since the spring of 2020. But Fed Chairman
Jerome Powell's testimony to Congress this week that he had a level
of confidence that inflation will subside allayed some of those
"That also reassures the market that the Fed will not be overly
hawkish in their tightening policy," said Peter van der Welle, a
strategist at Robeco. At the same time, "the infrastructure deal
also portrays that the fiscal thrust is still very much with us,"
The dollar could rise if U.S. economic data due later in the day
reinforce expectations that inflation will accelerate and the
Federal Reserve will respond by tightening its policies,
Strong data would point to "continued elevated price pressure
and might provide further momentum for dollar appreciation short
term," Commerzbank currency analyst Esther Reichelt said.
The Fed made it clear at its last meeting that it will react to
upside risks for inflation, she said.
The European Central Bank's ultra-loose policy stance means the
euro will suffer the lion's share of any dollar appreciation, ING
said."Unlike an increasing number of
emerging market countries who feel the need to respond to the
summer inflation spike, it seems the ECB is more than happy to
position itself as not being rushed into premature tightening," ING
That means the euro, along with the Japanese yen and Swiss
franc, will be the preferred funding currencies this summer, they
EUR/USD should continue to consolidate, although surprisingly
strong eurozone confidence indicators this week suggest the
exchange rate could rise to the 1.1980/90 area in coming days, they
Sterling's weakness after the Bank of England's policy decision
Thursday is likely to remain limited, MUFG Bank said.
The "hawkish" shift some market participants were expecting from
the BOE's policy statement failed to materialize but the central
bank is certainly moving in that direction, MUFG analyst Derek
"The upgrades to both real GDP growth in the second quarter and
inflation this year could well have implications for inflation over
the medium-term that compels the Monetary Policy Committee to alter
its monetary stance (taper) or guidance at the next meeting on
August 5 when the Monetary Policy Report will be released with
In bond markets, the yield on 10-year Treasury notes ticked up
to 1.488% from 1.486% Thursday.
Eurozone government bond yields were trading slightly higher
following better-than-expected economic data from Germany on
Friday. The strong reading is reassuring, said Joerg Zeuner chief
economist at the German asset manager Union Investment.
Oil prices edged higher as investors look ahead to next week's
OPEC+ meeting. Oil producers are set to meet on Thursday next
Expectations are that the cartel will agree to add 500,000
barrels a day of their output, said Helge Andre Martinsen, an
analyst at DNB.
"However, an increase of 0.5 million barrels a day for August is
not enough to flip the oil market balance, and the oil market will
stay in undersupply with oil inventories continuing to draw down,"
he said. Oil prices made modest gains this week amid expectations
of continued tight supplies.
Copper prices rose after President Biden and a group of senators
agreed to a roughly $1 trillion infrastructure plan. Three-month
copper on the LME gains 0.1% to $9,469.50 a metric ton.
The red metal is heavily used in infrastructure projects and
some investors are hopeful that the plan would boost demand for
copper. However, there are also growing concerns that copper's high
price may spur substitution toward cheaper metals such as aluminum,
which can also be used in electrical wiring.
"Arguments are starting to become more widespread on the subject
of substitution with an eye to the popular world of infrastructure
projects, " said Malcolm Freeman, Chief Executive of brokerage
Gold prices ticked higher ahead of U.S. price data which will be
eyed by investors for clues on the inflation outlook.
The PCE core price index, the Federal Reserve's preferred gauge
of inflation is due at 0830 ET. A stronger reading than expected
could heighten fears that Fed officials will move faster to raise
interest rates. While gold is typically considered an inflation
hedge, higher interest rates would lift bond yield and weigh on
"Fed officials are presenting a mixed view, but inflation
worries appear to be on the rise; which is gold negative," said
James Steel, chief precious metals analyst at HSBC.
Amazon, Google Face UK Probe Over Fake Reviews
The U.K.'s antitrust watchdog said Friday that it has launched
an investigation into whether Amazon.com Inc. and Google are doing
enough to crack down on fake reviews, adding a new layer to
regulatory scrutiny of U.S. tech giants.
German Consumer Confidence Set to Increase Strongly in July
German consumer sentiment is expected to rise in July as the
Covid-19 pandemic retreats and the economy reopens, according to
data from the market-research group GfK released Friday.
GfK's forward-looking consumer sentiment index is set to
increase to minus 0.3 points in July from minus 6.9 points in June,
the highest level since August 2020. Economists polled by The Wall
Street Journal had expected consumer sentiment to rise to minus
Renault, STMicroelectronics Join Forces on Chip Supplies
Renault SA and STMicroelectronics NV are working together to
secure supplies of key semiconductor components for the French car
maker's electric and hybrid vehicles, as a shortage of components
continues to squeeze the auto industry.
The companies said Friday in a joint statement that their
partnership would focus on the supply of electric and hybrid
vehicle advanced power semiconductors to be produced from 2026.
Adidas Shares Get a Boost From Nike's Upbeat Sales
Shares in sneaker maker Adidas AG rose Friday after its peer
Nike Inc. posted record sales fueled by solid U.S. consumer demand
for sportswear--an indicative sign of the sector's bright
Nike's sales nearly doubled in the quarter ended May 31, beating
consensus estimates and raising investors' expectations for sneaker
makers and sporting brands as economies in key regions reopen.
Roche: Actemra/RoActemra Gets FDA Emergency-Use Authorization
for Covid-19 Treatment
Roche Holding AG said Friday that it has received an
emergency-use authorization from the U.S. Food and Drug
Administration for its Actemra/RoActemra drug to treat certain
patients with Covid-19.
The Swiss pharmaceutical major said the authorization allows for
emergency use of Actemra/RoActemra for the treatment of Covid-19 in
hospitalized adults and children who are at least 2 years old.
Steinhoff International 1H Pretax Loss Narrowed, Revenue
Steinhoff International Holdings NV said Friday that its pretax
loss narrowed in the first half of fiscal 2021, while revenue
The South African conglomerate reported a narrowed pretax loss
of 219 million euros ($261.3 million) for the six months ended
March 31, from a restated pretax loss of EUR1.24 billion.
U.K. Car Manufacturing Suffers from Global Supply Shortages
U.K. car manufacturing rose in May compared with the same month
last year when the country was in its first coronavirus lockdown,
but is still 53% below the May 2019 figure, an industry body said
The Society of Motor Manufacturers and Traders said that
production is being hurt by global supply shortages, notably of
U.K. Consumer Confidence Stabilizes in June
Consumer sentiment in the U.K. leveled off in June following
four months of gains amid the gradual reopening of the economy.
Market-research firm GfK's consumer-confidence barometer stood
at minus nine in May, unchanged from April. The reading is below
the minus eight consensus forecast from economists polled by The
Wall Street Journal.
Food Companies Say Combating Climate Change Comes With Costs
Food companies are investing billions of dollars into
sustainability efforts, betting that costs will fall and consumers
will remain interested in more environmentally friendly diets,
Nestlé SA, the world's biggest food and beverage company, has
committed to paying premium prices over the next five years for
recycled materials in its packaging, as it works toward achieving
net-zero greenhouse-gas emissions by 2050. Agricultural giant
Archer Daniels Midland Co. is offering incentives for farmers to
adopt more climate-friendly practices, part of industry efforts to
meet corporate and government carbon-reduction goals.
Europeans Split Over Russia After Biden's Summit With Putin
European leaders rebuffed a proposal from Germany and France to
hold formal talks with Russian President Vladimir Putin, following
President Biden's summit with him last week.
After a meeting in Brussels that stretched into early Friday
morning, European Union leaders released a statement calling for
"selective engagement" with Russia but without explicit reference
to a summit, a rare defeat for German Chancellor Angela Merkel.
U.S. Considers a Plan to Relocate Afghans Who Aided U.S. During
The White House is assembling a plan to rescue Afghan
interpreters and others who have helped the U.S. over the past 20
years by helping them to get out of Afghanistan and, ultimately, to
the U.S., officials said.
The effort would involve quickly moving Afghan interpreters and
drivers who worked with the U.S. military out of Afghanistan-where
they have become targets of possible retaliation for the Taliban-to
another country or U.S. territory where they would be safe while
the U.S. State Department processes their visas to come to the
U.S., which typically takes several years.
Consumers Are Back Out Spending, Driving the Recovery
Consumers likely increased spending last month on services that
they shunned earlier in the Covid-19 pandemic, helping fuel the
broader economic recovery.
Economists surveyed by The Wall Street Journal expect Friday's
Commerce Department report to show consumer spending rose 0.4% in
May. They expect incomes fell 2.7% last month from April, as the
boost faded from government stimulus checks sent out earlier in the
Fed Gives Big Banks Clean Bill of Health in Latest Stress
WASHINGTON-The Federal Reserve gave large U.S. banks a clean
bill of health as they emerge from the coronavirus crisis, paving
the way for the lenders to boost their payouts to investors after
In a vote of confidence for the banks, including Goldman Sachs
Group Inc. and Wells Fargo & Co., the Fed on Thursday said it
would end temporary limits on dividend payments and share buybacks
after all 23 firms performed well in annual stress tests.
Saving for Retirement? Now You Can Bet on Bitcoin.
Cryptocurrencies, among the world's most volatile assets, are
searching for mainstream acceptance in the investment world. Their
next target: your retirement portfolio.
Financial services companies are rolling out new products and
services that allow more everyday investors to add bitcoin and
other virtual currencies to their nest eggs as a way of reaching
for higher returns. Some are marketed under names such as
"CryptoIRA" and "BitcoinIRA."
Fed's Williams Says More Progress Needed Before Rate-Hike
Federal Reserve Bank of New York President John Williams
reiterated Thursday he doesn't see a case to raise rates any time
soon given that the job market remains far short of the strength
the central bank wants to see.
When it comes to lifting rates, "it is not the time now because
the economy still is far from maximum employment," Mr. Williams
said in a virtual appearance. As for when the Fed may raise rates,
"the answer, which you might not like, is that it depends" on how
the economy performs, he said.
Numbers Ain't What They Used to Be in Turbulent U.S. Economy
There is a rule of thumb in data watching that, if you want to
understand which way things are trending, you need to watch the
revisions. What is happening with capital spending might be a case
The Commerce Department on Thursday reported that U.S.
manufacturers' new orders for durable goods rose 2.3% in May from
April, lower than the 2.6% gain economists expected. Much of that
increase was due to a jump in aircraft orders, which are often
Environmental Investing Frenzy Stretches Meaning of 'Green'
The first time Gerard Barron tried to mine the sea floor, the
company he backed lost a half-billion dollars of investor money,
got crosswise with a South Pacific government, destroyed sensitive
seabed habitat and ultimately went broke. Now he's trying again,
but with a twist: Mr. Barron is positioning his new seabed mining
venture, The Metals Company, as green, to capitalize on a surge of
environmentally minded investment.
TMC is set to receive nearly $600 million in investor cash in a
deal slated to take the company public in July. If successful, that
would value TMC at $2.9 billion-more than any mining company ever
to go public in the U.S. with no revenue.
Sydney Locks Down as Delta Covid-19 Variant Spreads
SYDNEY-Parts of Australia's largest city will go into a rare
lockdown for at least a week as officials seek to stamp out an
outbreak of the highly infectious Delta variant of the
People who live or work in four areas in and near downtown
Sydney and the iconic Bondi Beach have been ordered to stay home
from Friday night to stem the spread of the virus first detected in
the city last week.
Derek Chauvin Faces Sentencing for Murder of George Floyd
MINNEAPOLIS-Former Minneapolis police officer Derek Chauvin is
expected to be sentenced Friday afternoon for the murder of George
Floyd, closing out a chapter in a case that redefined the
conversation over race and policing in the U.S.
Mr. Chauvin, 45 years old, was convicted in April of all counts:
second-degree murder, third-degree murder and manslaughter in the
killing of Mr. Floyd. The 46-year-old Black man died after the
white officer knelt on his neck and back for more than nine
minutes. Mr. Chauvin was fired from the Minneapolis police
Biden, Senators Agree to Roughly $1 Trillion Infrastructure
WASHINGTON-President Biden and a group of 10 centrist senators
agreed to a roughly $1 trillion infrastructure plan Thursday,
securing a long-sought bipartisan deal that lawmakers and the White
House will now attempt to shepherd through Congress alongside a
broader package sought by Democrats.
Mr. Biden and Democratic leaders said that advancing the deal on
transportation, water and broadband infrastructure will hinge on
the passage of more elements of Mr. Biden's $4 trillion economic
agenda. The two-track process sets up weeks of delicate
negotiations to gather support for both the bipartisan plan and a
separate Democratic proposal, a challenging task in the 50-50
Senate and the narrowly Democratic-controlled House.
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(END) Dow Jones Newswires
June 25, 2021 06:23 ET (10:23 GMT)
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