Jul 27, 2019: Stock markets in Europe and the United States pushed higher on Friday, with Wall Street indices scoring fresh records, as investors remained confident about the prospect of interest rate cuts.
In Europe, investors focused on the likelihood the European Central Bank will move forward with measures to boost the economy at its next meeting in September, despite the fact that in his comments on Thursday ECB chief Mario Draghi was less dovish — or open to an easing of monetary policy — than expected.
“The prospect of a rate cut in September is still on the table and traders are snapping up relatively cheap stocks,” said CMC Markets analyst David Madden.
“Yesterday acted as a speed bump and today dealers are reshaping their outlook, which remains broadly positive,” he added.
Frankfurt stocks finished the day 0.5 percent higher and Paris 0.6 percent. London climbed 0.8 percent, with the weaker pound a plus for companies listed there that report their earnings in other currencies.
Wall Street also enjoyed a strong session, with both the S&P 500 and Nasdaq shooting to new records following generally good earnings as investors anticipated an expected Federal Reserve interest rate cut next week.
Confidence remains strong that the Fed will cut interest rates next week even after a recent spate of largely solid economic data, including Friday's better-than-expected US growth report for the second quarter.
– Progress on trade? –
The new records came as President Donald Trump both warned of retaliatory tariffs on French wine due to a French tax on American tech giants and also threatened to withdraw recognition of China's “developing nation” status at the World Trade Organization.
But those moves were not consequential enough to outweigh hopes that next week's face-to-face trade meetings between the United States and China will lead to progress, said Art Hogan, chief market strategist at National Securities.
Hogan said the exchange of goods between the United States and France was comparatively small, while the threat against developing nations at the WTO appeared to be a ploy for another bargaining chip in trade talks with China.
“I don't think that this is necessarily another escalation,” Hogan said.
Among individual companies, Google parent Alphabet surged 10.5 percent after reporting that earnings tripled in the second quarter from a year earlier to $9.9 billion and announcing $25 billion in stocks buybacks.
Starbucks was another big winner, surging 8.9 percent as it lifted full-year profit and sales targets and reported a six percent jump in comparable store sales.
Telecom giants T-Mobile and Sprint won 5.4 percent and 7.4 percent as US antitrust enforcers approved their $26 billion merger.
The deal calls for Sprint to sell some of its prepaid wireless operations to satellite TV operator Dish Network, which would create its own telecom service. Dish climbed 0.9 percent.
– Key figures around 2050 GMT –
- New York – Dow: UP 0.2 percent at 27,192.45 (close)
- New York – S&P 500: UP 0.7 percent at 3,025.86 (close)
- New York – Nasdaq: UP 1.1 percent at 8,330.21 (close)
- London – FTSE 100: UP 0.8 percent at 7,549.06 (close)
- Frankfurt – DAX 30: UP 0.5 percent at 12,419.90 (close)
- Paris – CAC 40: UP 0.6 percent at 5,610.05 (close)
- EURO STOXX 50: UP 0.4 percent at 3,524.47 (close)
- Tokyo – Nikkei 225: DOWN 0.5 percent at 21,647.29 (close)
- Hong Kong – Hang Seng: DOWN 0.7 percent at 28,397.74 (close)
- Shanghai – Composite: UP 0.2 percent at 2,944.54 (close)
- Pound/dollar: DOWN at $1.2383 from $1.2458 at 2100 GMT
- Euro/pound: UP at 89.86 pence from 89.48 pence
- Euro/dollar: DOWN at $1.1128 from $1.1147
- Dollar/yen: UP at 108.66 yen from 108.63
- Brent North Sea crude: UP 7 cents at $63.46 per barrel
- West Texas Intermediate: UP 18 cents at $56.20 per barrel