Global Stocks Gain on Hopes for Rate Cut
July 19 2019 - 6:13AM
Dow Jones News
By Nathan Allan
--Markets in Europe and Asia tick higher
--Brent crude gains on Iran tensions
--U.S. futures trade up
Global stocks rose Friday as investors welcomed comments from a
Federal Reserve official that seemed to strengthen the case for an
interest-rate cut.
Automotive, chemical and food-and-beverage companies led gains
on the pan-continental Stoxx Europe 600 index, which rose 0.4% to
reverse a two-day losing streak.
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 Ltd. in an
$11.3 billion deal in an effort to pare its debt load.
German luxury car maker BMW AG rose about 1% after nominating
its head of production, Oliver Zipse, to be the next chief
executive. Evercore ISI analyst Arndt Ellinghorst said Mr. Zipse's
appointment was a decision made in favor of stability and
continuity in a volatile world.
Meanwhile, France's Publicis Groupe dropped 8.6% after the
advertising giant cut its outlook, prompting a downgrade from
analysts at Liberum.
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%.
In the U.S., future contracts tied to the S&P 500 index rose
about 0.3%. Friday is poised to be another big day for investors in
financial stocks, with BlackRock, State Street and American Express
all poised to report second-quarter results.
U.S. stocks closed higher on Thursday after Federal Reserve Bank
of New York 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. Still, short-term Treasury yields fell
sharply on Thursday following those remarks.
The yield on the 10-year Treasury note rose to 2.041% Friday,
while the 2-year note rate, sensitive to shifting expectations for
Fed policy, ticked up to 1.781%, according to data from FactSet.
The WSJ Dollar Index climbed 0.3% to 89.89.
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 Federal Reserve at the end of the month and provide some
support for the U.S. dollar, Rabobank said.
Meanwhile, global oil benchmark Brent crude rose nearly 1.4%,
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 further raised
tensions between the nations.
-- Lauren Almeida contributed to this article
(END) Dow Jones Newswires
July 19, 2019 05:58 ET (09:58 GMT)
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