U.S. Futures Track Global Stocks Upwards on Trade Optimism
July 23 2019 - 8:18AM
Dow Jones News
By Anna Isaac
-- S&P 500, Dow futures rise 0.3%
-- U.S. 10-year Treasury yields tick higher
-- Asian, European indexes broadly gain
U.S. futures followed global stocks higher after the U.S. moved
to rekindle stalled trade talks with China.
President Trump met with major technology companies at the White
House on Monday to discuss restrictions on Chinese telecom giant
Huawei, a move seen as a step toward softening the U.S. stance on
the blacklisted firm.
Wall Street was set for another crop of results from major
corporations, which led the field in premarket trading. Coca-Cola
Co.'s shares rose by 1.9% premarket after it reported earnings and
revenue that beat expectations. Shares in United Technologies Corp.
also climbed 2.5% before the opening bell, after a strong second
quarter saw it increase it sales expectations for 2019 as a
whole.
Results from insurance firm Travelers Cos. and Visa Inc. were
also due Tuesday.
Separately, Congress struck a deal late Monday with the White
House over spending, which would suspend the federal debt ceiling
until the end of July 2021. The move effectively took the matter
off the table until after the next presidential election.
In the U.K., as widely expected, Boris Johnson, the former
foreign secretary and leading voice of the campaign to leave the
EU, won the Conservative competition for party leader and is now
set to become the country's new prime minister.
The leadership change prompted a muted response from markets,
with the British pound little changed. Derek Halpenny of MUFG Bank
Ltd. said that unless there were signs that support was ebbing away
from Mr. Johnson, in the form of further cabinet resignations or
parliamentary party defections, there would "not be much in terms
of volatility in equities, currencies or bonds."
In Europe, shares of trade-sensitive auto-related companies led
gains. Faurecia SA, an auto parts maker, had the biggest gain in
the region at 10.4%, after posting better-than-expected results in
its Chinese and South American operations, according to UBS.
Daimler AG rose 4%, after it said that China's state-owned Beijing
Automotive Group Co. had taken a roughly 5% stake in the
company.
Technology firm Logitech International climbed 7.1% after it
said it was on track to meet its 2020 sales and revenue
targets.
The positive mood in markets was gaining support both from
central banks and cooling trade tensions, said Thushka Maharaj,
global strategist at J.P. Morgan Asset Management. Analysts expect
a cut to interest rates from the Federal Reserve next week, and
evidence of more stimulus from the European Central Bank on
Thursday.
Still, a "sustained rally" across assets would require an
improvement in underlying economic indicators, most particularly
"manufacturing data across Europe and Asia," Ms. Maharaj said.
Shares in Spanish lender Banco Santander SA and Swiss bank UBS
Group AG both rose 3% and 2.4%, respectively, following their
earnings reports. UBS's profit came in well ahead of expectations,
and while Santander reported a tumble in net profit of 18% after
costly restructuring efforts, this was largely in line with
analysts' forecasts.
Asian markets also were up, with Shanghai up 0.5%, Hong Kong's
Hang Seng up 0.3% and Japan's Nikkei up 1%.
(END) Dow Jones Newswires
July 23, 2019 08:03 ET (12:03 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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