Global stocks rebound with U.S. bank earnings in focus
Stocks staged a broad recovery on Friday as earnings reports from some of America’s biggest banks gave investors something to cheer about at the end of a tumultuous week. The U.S. dollar and Treasuries were steady.
U.S. equity-index futures jumped the most in four months, suggesting the S&P 500 may snap its six-day losing streak when American markets open. JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co. kicked off the third-quarter reporting season with mostly positive results. The Stoxx Europe 600 index gained for the first time in three days, with miners leading the advance and most sectors in the green, though the gauge is still headed for its worst week since February.
Strong trade data from China also buoyed markets, with the MSCI Asia Pacific Index rising from the lowest level since May 2017 as shares in Hong Kong and South Korea led the way. Emerging-market stocks headed for the biggest gain in more than two years as risk appetite improved, and most developing-nation currencies advanced against the dollar. The yuan retreated following a Bloomberg report that U.S. Treasury staff concluded China isn’t manipulating its exchange rate.
China trade data showed exports rebounded, while imports remained robust, thanks to strong demand at home and abroad despite worsening relations with the U.S. That eased some concern about the impact of the trade war, which had contributed to the worst equity sell-off since February amid worries about the Federal Reserve’s policy path. As traders debate whether the correction has created buying opportunities, the third-quarter reports from U.S. companies will tell whether tax breaks are still supporting corporate earnings.
Traders will be watching the yuan after the report that U.S. Treasury staff advised Secretary Steven Mnuchin that China isn’t manipulating the exchange rate, as the Trump administration prepares to issue a closely watched report on foreign currencies.
Meanwhile, West Texas oil recovered, but is still heading for the biggest weekly drop since May, after the International Energy Agency cut forecasts for demand this year, but said dwindling supply will keep prices high. Gold slipped, but copper led a gauge of industrial metals higher.
These are the main moves in markets:
Stocks
The Stoxx Europe 600 Index climbed 0.7 per cent as of 8:29 a.m. New York time, the biggest gain in more than three weeks. Futures on the S&P 500 Index surged 1.1 per cent, the first advance in more than a week and the largest jump in more than 19 weeks. The MSCI All-Country World Index rose 0.4 percent. The U.K.’s FTSE 100 Index increased 0.7 per cent. Germany’s DAX Index added 0.8 percent. The MSCI Emerging Market Index surged 2.4 per cent, the first advance in more than a week and the largest jump in more than two years.
Currencies
The Bloomberg Dollar Spot Index climbed less than 0.05 per cent. The euro declined 0.2 per cent to US$1.1573. The British pound fell 0.3 percent, the largest drop in more than a week. The Japanese yen dipped 0.1 per cent to 112.32 per dollar, the first retreat in more than a week.
Bonds
The yield on 10-year Treasuries gained one basis point to 3.16 per cent. Germany’s 10-year yield decreased less than one basis point to 0.52 per cent. Britain’s 10-year yield fell three basis points to 1.644 per cent. Japan’s 10-year yield increased less than one basis point to 0.15 per cent.
Commodities
West Texas Intermediate crude gained 1.3 per cent to $71.90 a barrel, the largest rise in more than a week. Gold decreased 0.1 per cent to US$1,223.25 an ounce. Copper increased 0.7 per cent to US$2.82 a pound, the highest in more than a week.
Source: BNN Bloomberg
https://www.bnnbloomberg.ca/global-stocks-rebound-with-u-s-bank-earnings-in-focus-1.1151482
