Trade Prospects Lift Global Stocks
September 14 2018 - 9:41AM
Dow Jones News
By Riva Gold
-- Stocks head for weekly gains
-- U.S. retail sales eyed
-- Nikkei closes at highest since February
Global stocks inched higher Friday as trade prospects appeared
to improve, putting most major indexes on track for weekly
gains.
Futures pointed to a 0.1% opening rise for the S&P 500 after
the index notched its biggest gain in two weeks on Thursday. The
Stoxx Europe 600 was up 0.2% in afternoon trading, while markets in
Asia closed higher.
Stocks have swung back and forth in recent sessions as investors
attempt to assess the potential impact of new trade agreements on
supply chains and the global economy.
The latest boost for stocks appeared to come from news the Trump
administration is giving Beijing another chance to try to stave off
new tariffs on $200 billion in Chinese exports, asking top
officials for a fresh round of trade talks later this month, The
Wall Street Journal reported earlier this week.
"What's driving intraday volatility and choppiness in the
market? It's going to be trade," said Shawn Cruz, who manages
trading strategy at TD Ameritrade. "We still haven't seen what's
actually going to get put in place...so it's more or less a risk
aversion exercise."
Technology stocks were among the best performers in Europe and
Asia on Friday after Apple and other technology companies led gains
in the U.S. on Thursday, a day after announcing a new lineup of
mobile devices.
In Europe, shares of Siltronic rose 4.2% while
STMicroelectronics and Infineon Technologies rose 1.4% and 1.8%,
respectively. AAC Technologies Holdings rose 5.5% in Hong Kong.
Shares of auto and mining companies were also among the biggest
advancers in Europe while banks lagged behind.
Shares in Danske Bank fell almost 1.7% after The Wall Street
Journal reported that U.S. law enforcement agencies are probing
Denmark's largest bank over allegations of massive money-laundering
flows from Russia and former Soviet states.
Asian stocks were broadly higher, with benchmarks in Japan, Hong
Kong and South Korea up 1% or more thanks to support from companies
in the technology and consumer discretionary sectors. Japan's
Nikkei closed at its highest level since early February, ending its
best week since July.
Shanghai stocks edged down 0.2% however, posting a third
straight weekly decline. Investment in factories, railways and
other projects in China so far this year grew at its slowest pace
in more than a quarter-century, data showed.
Softness in the U.S. dollar and stabilization in some emerging
markets has also helped improve investors' appetite for risk,
analysts said.
The ICE Dollar Index was little changed Friday, on track to end
the week 0.8% lower. Many emerging-market currencies have gained
ground this week, with the Turkish lira rising around 5% as the
central bank sharply raised interest rates. The Russian ruble rose
0.7% on Friday and around 3% for the week after Russia's central
bank raised its key interest rate to 7.5% from 7.25%, ending a
series of cuts.
Shoqat Bunglawala, head of the global portfolio solutions group
for EMEA and Asia Pacific at Goldman Sachs Asset Management, said
he is cautious on emerging markets in the short term because of
issues largely stemming from market sentiment and volatility, but
in the medium term is still very positive on broader emerging
markets.
Many are in a substantially better position that they were a few
years ago, he said, pointing to improvements in earnings growth and
well-anchored inflation.
Investors were also watching U.S. retail sales figures on
Friday, which showed American consumers reined in their spending in
August, taking a breather after very strong sales growth in
July.
A robust economy drove U.S. wages higher in August, data showed
last week, with private-sector hourly wages growing 2.9% from a
year earlier, the fastest pace since mid-2009.
"If that's not translating into retail spending, retailers will
feel the brunt of that move" as it costs more to pay their
employees, Mr. Cruz said.
Yields on 10-year German government bonds continued to climb,
trading around 0.45% a day after the European Central Bank said it
would press ahead with a plan to phase out easy money. Yields move
inversely to prices.
Write to Riva Gold at riva.gold@wsj.com
(END) Dow Jones Newswires
September 14, 2018 09:26 ET (13:26 GMT)
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