Global Stocks Gain on Hopes for Rate Cut

Date : 07/19/2019 @ 11:13AM
Source : Dow Jones News
Stock : Bayerische Motoren Werke AG (BMW)
Quote : 50.35  1.79 (3.69%) @ 2:44PM
Bayerische Motoren Werke share price Chart

Global Stocks Gain on Hopes for Rate Cut

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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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