Left Menu
Development News Edition

GLOBAL MARKETS-Wall Street stocks climb, dollar drops on rate-cut optimism

Reuters | Updated: 13-07-2019 01:48 IST | Created: 13-07-2019 00:43 IST
GLOBAL MARKETS-Wall Street stocks climb, dollar drops on rate-cut optimism
Image Credit: Storyblocks

Wall Street stocks edged higher and the dollar fell on expectations of a U.S. interest-rate cut on Friday, while oil futures were little changed as supply worries triggered by a tropical storm were offset by signs of a global surplus for several months. In U.S. Treasuries the yield curve was slightly steeper, with yields largely unmoved by stronger-than-expected producer price data and market expectations of an interest rate cut in July held firm after two days of testimony from Federal Reserve Chair Jerome Powell.

Wall Street's benchmark, the S&P 500, and the Dow Jones Industrial Average rose modestly a day after hitting record highs. The market already rallied in expectation of a rate cut, and now that Powell basically confirmed a July cut, it is "churning before it makes the next move" during the quarterly earnings season that kicks off next week, said Ken Polcari, managing principal at Butcher Joseph Asset Management in New York.

Polcari said the improving economic data is making investors cautious over the Fed's rate path. "Now there's a little trepidation that if the data is coming in strong why are we cutting rates?" he said. "The market's thinking he's going to cut rates in July and then that'll be it."

The Dow Jones Industrial Average rose 188.01 points, or 0.69%, to 27,276.09, the S&P 500 gained 9.7 points, or 0.32%, to 3,009.61, and the Nasdaq Composite added 40.41 points, or 0.49%, to 8,236.45. All three stock indexes were on track for their second weekly advance in a row ahead of the start of the second-quarter corporate earnings season. Analysts are forecasting a decline in S&P 500 earnings per share of 0.4% for the quarter, according to I/B/E/S data from Refinitiv.

"Most of the gains this year have been from multiple expansion. Earnings need to start doing its part. Otherwise, you risk people looking at multiple expansion saying this looks like a top," said Michael Antonelli, market strategist at Robert W. Baird in Milwaukee. The pan-European STOXX 600 index rose 0.04% and MSCI's gauge of stocks across the globe gained 0.24%.

U.S. producer prices rose slightly in June as a rising cost of services was offset by cheaper energy costs, beating economists' expectations that prices would be unchanged. The Labor Department report comes on the heels of strong consumer price data published on Thursday, suggesting overall inflation could continue to rise moderately despite the gains in consumer prices.

"One individual dataset will not sway or set" the Fed's decision on interest rates, said Michael Lorizio, a senior fixed-income trader at Manulife Investment Management. In Treasuries, benchmark 10-year notes last rose 3/32 in price to yield 2.1097%, from 2.12% late on Thursday.

In currencies, continued bets on a U.S. rate cut sent the dollar lower for the third day in a row. The dollar index, which tracks the greenback against six major peers, fell 0.26%, with the euro up 0.19% to $1.1273. The Japanese yen strengthened 0.63% versus the greenback at 107.83 per dollar.

In commodities, oil prices inched up on Friday as U.S. Gulf of Mexico crude output was halved by disruptions caused by a tropical storm, but concerns over a global crude surplus in the months ahead limited gains. U.S. crude futures settled up 1 cent at $60.21 per barrel while Brent crude ended up 20 cents at $66.72.

Gold prices nudged higher as investors shrugged off concerns that the stronger-than-expected U.S. consumer inflation could influence the Fed's decision on aggressive monetary policy easing. Spot gold added 0.9% to $1,416.40 an ounce.


TRENDING

OPINION / BLOG / INTERVIEW

3D printing and the future of manufacturing post COVID-19

The on-demand, customizable, and localized manufacturing of product components facilitated by 3D printing has the potential to redefine manufacturing but there are certain technical, mechanical, and legal limitations that, unless ...

How UK’s 'best prepared' healthcare system failed to gauge COVID-19

The UK is proud of their public health system and its unlike any other country as around 90 percent of British public supports the founding principles of National Health Service. But without accurate data being available to stakeholders in ...

Poor on IHR capacity progress in 2019, WHO says Cambodia tops COVID-19 response

Despite being in proximity to Hubei, the original epicenter of COVID-19 pandemic, Cambodia has reported just 226 confirmed cases and zero deaths. After seeing the data, WHO appreciated Cambodias healthcare information system but experts dou...

Loopholes in Healthcare Information System may have failed Singapore COVID-19 model

In the initial days of the COVID-19 outbreak, Singapore was in the limelight for its effective healthcare system and pandemic response plan. However, Singapore has now joined the list of the worst-hit nations and the situation is even worse...

Videos

Latest News

Kumaraswamy takes a dig at BJP, says temple issue 'political

Former Chief Minister H D Kumaraswamy on Wednesday sought to take a dig at the BJP, saying the Ram temple issue was used as a political pawn and ladder to climb to power. We as Indians had to wage a legal battle for building a mandir at Ayo...

Initial investigations point to negligence as cause of Beirut blast - source

Initial investigations indicate years of inaction and negligence over the storage of highly explosive material in Beirut port caused the blast that killed over 100 people on Tuesday, an official source familiar with the findings said.The pr...

EXPLAINER-Europe's coronavirus smartphone contact tracing apps

More than 20 countries and territories in Europe have launched or plan smartphone apps that seek to break the chain of coronavirus infection by tracking encounters between people and issuing a warning should one of them test positive. Most ...

Wife of Dutch ambassador seriously injured in Beirut blast -ministry

The wife of the Dutch ambassador to Lebanon was seriously injured by a huge blast that took place in Beiruts port on Tuesday, the Dutch Foreign Ministry said on Wednesday.A spokesman said she had been admitted to hospital. He said the blast...

Give Feedback