Fed Chief's Confidence Bolsters Stocks, Dollar 17 July 2018
Fahad Shabbir (@FahadShabbir) Published July 17, 2018 | 10:01 PM
Stocks and the dollar rose on Tuesday as the head of the Federal Reserve said the economic outlook remains strong despite uncertainty over trade policy.
London, (UrduPoint / Pakistan Point News - 17th Jul, 2018 ) :Stocks and the Dollar rose on Tuesday as the head of the Federal Reserve said the economic outlook remains strong despite uncertainty over trade policy.
Upbeat about the US economy, Federal Reserve chief Jerome Powell began two days of congressional testimony on Tuesday by indicating the central bank will continue to raise rates gradually.
US stocks reversed modest losses from the start of trading, while the dollar strengthened. The drop in the value of the euro and pound helped push European stocks into positive territory as well.
"European markets have moved higher in unison today, as the decline in European currencies help drive gains for stocks," said IG market analyst Joshua Mahony.
Stock markets mostly slid across Asia, led by share price falls for the energy sector one day after oil prices plunged on excess supply concerns.
Brent crude hit another three-month low Tuesday, at $71.35 per barrel, before recovering.
While painting a positive picture about the US economy, Powell acknowledged that it was "difficult to predict the ultimate outcome of current discussions over trade policy," a clear reference to the aggressive tariff policies adopted by President Donald Trump against China and many US trading partners.
The International Monetary Fund warned Monday escalating trade tensions and tariff threats, if carried out, could disrupt global growth and derail investments.
Fears about a China-US trade war continue to nag investors, with both sides filing counter-complaints at the World Trade Organisation after recently imposing and threatening further tariffs on billions of Dollars worth of goods.
On Tuesday, the EU and Japan signed a sweeping free trade deal that officials called a "clear message" against protectionism, as Washington imposes controversial tariffs and threatens a trade war.
The huge deal was signed as US President Donald Trump unsettles allies and provokes rivals with his aggressive "America First" trade policy.
Both the EU and Japan have been hit with new US tariffs despite their long-standing alliances with Washington.
Markets' attention is also on the start of the corporate earnings season, with Netflix disappointing analysts on growth in the number of its subscribers in data released late Monday still affecting markets.
Its shares plunged nearly 13 percent in early trading on Tuesday before recovering some of the losses.
The streaming service said membership grew 5.2 million to 130 million, a million shy of what the company had forecast.
Shares in investment bank Goldman Sachs dropped 1.3 percent after reporting a 44 percent jump in second-quarter earnings to $2.3 billion and announcing that David Solomon would succeed Lloyd Blankfein as chief executive.
In Germany, shares in Thyssenkrupp jumped 9.1 percent as the departure of another key executive boosted chances that activist investors will succeed in their effort to split apart the industrial conglomorate.
- Key figures at 1530 GMT - New York - Dow: UP 0.04 percent at 25,075.62 points London - FTSE 100: UP 0.3 percent at 7,626.33 (close) Frankfurt - DAX 30: UP 0.8 percent at 12,661.54 (close) Paris - CAC 40: UP 0.2 percent at 5,422.54 (close) EURO STOXX 50: UP 0.3 percent at 3,459.36 Tokyo - Nikkei 225: UP 0.4 percent at 22,697.36 (close) Hong Kong - Hang Seng: DOWN 1.3 percent at 28,181.68 (close) Shanghai - Composite: DOWN 0.6 percent at 2,798.31 (close) Euro/dollar: DOWN at $1.1692 from $1.1712 at 2100 GMT Pound/dollar: DOWN at $1.3179 from $1.3237 Dollar/yen: UP at 112.79 Yen from 112.27 yen at 2100 GMTOil - Brent Crude: UP 28 cents at $72.12 per barrelOil - West Texas Intermediate: DOWN 44 cents at $67.62 per barrel
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