Global Stocks Struggle as Dollar Pulls Back -- 2nd Update
November 02 2017 - 5:09AM
Dow Jones News
By Christopher Whittall and Kenan Machado
Stock markets around the world struggled to gain momentum
Thursday, while the U.S. dollar slipped slightly following reports
that President Donald Trump is set to choose a new head of the
Federal Reserve.
The WSJ Dollar Index was down 0.2% recently after The Wall
Street Journal reported that Mr. Trump intends to nominate Fed
governor Jerome Powell to be the central bank's next chairman.
The Stoxx Europe 600 was flat in early trade, while futures
markets pointed to a small opening loss for the Dow Jones
Industrial Average after Wall Street ended higher the previous day.
Most Asian markets notched small declines.
Investors have a busy calendar of events to follow Thursday. In
the U.K., the Bank of England is widely expected to lift its main
interest rate for the first time in more than a decade. In
Washington, House Republican leaders are rushing to release their
tax plan.
Analysts also remain focused on the latest batch of company
earnings, which many credit as the primary driver of big gains for
stocks this year. Facebook Inc. reported a sharp jump in
third-quarter profit on Wednesday, while Apple Inc. is due to
release results later Thursday.
"The real momentum at the moment is with the technological
sector," said Paul Markham, a fund manager with Newton Investment
Management.
Mr. Markham said he's happy to own technology stocks still, even
if he is worried about "the crowded nature of that" trade.
"There's no doubt that the future of the economy does sit in the
hands of these guys," he said.
In Europe, shares in Credit Suisse Group AG rose 1.9% after the
Swiss banking giant reported a jump in third-quarter net profit on
strong growth in wealth management.
Moves in currencies and bond markets were muted following
reports of the appointment of Mr. Powell, an ally of Fed Chairwoman
Janet Yellen who is widely expected to continue the central bank's
gradual approach to tightening monetary policy. Separately, the Fed
also kept policy on hold on Wednesday as expected and signaled it
remains on course to raise interest raise rates once more this
year.
The dollar pared some of its earlier losses during European
trading hours, but remained weaker against other major currencies.
In bond markets, the yield on the 10-year Treasury note was 2.371%
recently, according to Tradeweb, from 3.378% on Wednesday.
Chatter that proposed tax cuts also set to be unveiled Thursday
wouldn't be as extensive as expected weighed on the dollar, said
Sean Callow, a forex strategist at Westpac.
In the Asia-Pacific region, China's Shanghai Composite Index
fell 0.4%, while Australia's S&P/ASX 200 declined 0.1%. Japan
was the region's notable outperformer, with a rally in the last
hour of trading sending the Nikkei Stock Average up 0.5% to another
21-year high.
In commodity markets, Brent crude oil was down 0.4% at $60.27 a
barrel.
Write to Christopher Whittall at christopher.whittall@wsj.com
and Kenan Machado at kenan.machado@wsj.com
(END) Dow Jones Newswires
November 02, 2017 04:54 ET (08:54 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.