Stocks advance as trade hopes grow; dollar steady

Futures on the S&P 500, Nasdaq, and Dow Jones all climbed as Trump also appeared to move closer to accepting a border deal that would avoid another government shutdown. The Stoxx Europe 600 Index rose for the third day.

Feb 13, 2019 01:02 IST India Infoline News Service

Bull market presents uptrend stock market
Stocks extended gains on Wednesday after President Donald Trump signaled a more conciliatory stance toward China, fueling hopes of a breakthrough in the trade war. The dollar gained and Treasuries edged lower after data showed US inflation remained contained.

Futures on the S&P 500, Nasdaq, and Dow Jones all climbed as Trump also appeared to move closer to accepting a border deal that would avoid another government shutdown. The Stoxx Europe 600 Index rose for the third day.

Equities advanced across Asia, with shares in Shanghai surging the most in five weeks after the US president said he’s open to extending a March 1 deadline to raise tariffs on Chinese products if the two sides are near an agreement.

The euro weakened after a report showed industrial production across the 19-nation region is falling at the fastest pace since the financial crisis. Oil added to its rebound from a two-week low after Saudi Arabia pledged to deepen output cuts.

With major central banks seemingly on pause or turning dovish, investor attention now appears firmly focused on the outlook for global trade and the chances of progress at the next round of talks between the US and China in Beijing. Protectionist measures have been heaping pain on many large economies, many of which are also grappling with a slowdown in growth.

“Markets have interpreted the fragments of information emanating from the trade talks positively, with risk assets starting to recoup recent losses,” said Nema Ramkhelawan-Bhana, an economist at FirstRand Bank Ltd. in Johannesburg. “Let’s hope that the positivity imbued in risk assets is not based on false optimism, especially as concerns over slowing global growth continue to mount.”

Elsewhere, Sweden’s krona gained after the Riksbank dropped its currency-intervention mandate. The British pound edged up even after UK inflation fell below the Bank of England’s 2% target for the first time in two years. The New Zealand dollar surged after the central bank hinted at a less dovish policy path than many had expected.

These are the main moves in markets:

Stocks
  • The Stoxx Europe 600 Index rose 0.6% as of 8:33 AM New York time.
  • Futures on the S&P 500 Index rose 0.2%.
  • The MSCI All-Country World Index rose 0.2%.
  • The UK’s FTSE 100 Index rose 0.6%.
  • The MSCI Emerging Market Index rose less than 0.05%.

Currencies
  • The Bloomberg Dollar Spot Index rose 0.2%.
  • The euro decreased 0.3% to $1.1294.
  • The British pound gained 0.1% to $1.2905.
  • The Japanese yen dipped 0.3% to 110.81 per dollar, the weakest in almost seven weeks.

Bonds
  • The yield on 10-year Treasuries rose one basis point to 2.70%.
  • Germany’s 10-year yield gained less than one basis point to 0.13%, the highest in a week.
  • Britain’s 10-year yield rose one basis point to 1.195%.
  • Japan’s 10-year yield rose one basis point to -0.006%.

Commodities
  • West Texas Intermediate crude climbed 0.5% to $53.38 a barrel, the highest in a week.
  • Gold declined 0.1% to $1,309.31 an ounce.

Here are some key events coming up:
  • Chinese Vice Premier Liu He is expected to join US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin in high-level trade talks Thursday and Friday.
  • Earnings season continues with reports from companies including Cisco, Vivendi, Nvidia, Nestle, Coca-Cola and Credit Suisse.

Source: Bloomberg

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