GLOBAL MARKETS-Dollar gains, stocks scale fresh highs on data, trade deal

Reuters | Updated: 16-01-2020 22:23 IST | Created: 16-01-2020 22:23 IST
GLOBAL MARKETS-Dollar gains, stocks scale fresh highs on data, trade deal

The dollar rose while key world and stock indexes on Wall Street scaled new records on Thursday as the U.S.-China trade deal, strong corporate earnings and encouraging U.S. economic data lifted equity markets.

Oil rose as the long-awaited Phase 1 trade deal brought some relief to markets, while gold prices slid below the psychological level of $1,500 an ounce as the upbeat data signaled a healthy U.S. economy. U.S. retail sales increased for a third straight month in December and the number of Americans filing claims for unemployment benefits dropped for a fifth straight week last week, indicating the labor market remained strong.

Other data showed a gauge of manufacturing activity in the U.S. Mid-Atlantic region rebounded in January to its highest in eight months, leading the Federal Reserve Bank of Philadelphia to call the factory outlook the brightest in more than 18 months. Upbeat earnings from Morgan Stanley and a tech rally on Wall Street added to optimism from a trade deal investors hope will ease an 18-month U.S.-Sino dispute that has roiled markets and crimped global growth.

"We believe the agreement underpins a positive outlook for risk assets, especially emerging market stocks," said Mark Haefele, chief investment officer at UBS Global Wealth Management. "But it is also important for investors to understand the limitations of the deal. So we see the deal as representing a partial calming rather than an end to trade tensions."

MSCI's gauge of stocks across the globe gained 0.33% to an all-time high, while emerging market stocks rose 0.21%. U.S. stocks also climbed to new highs, as did Canadian shares on Bay Street in Toronto.

The Dow Jones Industrial Average rose 165.9 points, or 0.57%, to 29,196.12. The S&P 500 gained 16.61 points, or 0.50%, to 3,305.9 and the Nasdaq Composite added 52.71 points, or 0.57%, to 9,311.41. Technology stocks provided the biggest boost on Wall Street, with Apple Inc up more than 0.6% and chipmakers gaining after a strong forecast from the world's top contract chipmaker TSMC signaled a recovery in the sector.

The Philadelphia Semiconductor index climbed 1.0%. European shares edged higher but Asia saw China's biggest stocks take a slight dip overnight.

The pan-European STOXX 600 index rose 0.17%. The dollar index erased earlier losses to rise on the data.

"The data flurry was positive, particularly the Philly Fed number," said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets in New York. It "reduces the probability for a recession, which was low already." The dollar index rose 0.1%, with the euro down 0.16% at $1.1131. The Japanese yen weakened 0.23% versus the greenback at 110.17 per dollar.

Crude oil gains of more than 1% were capped after the International Energy Agency said it expected oil production to outpace demand. Brent rose 70 cents to $64.70 a barrel and West Texas Intermediate advanced 87 cents to $58.68 a barrel.

China committed to buy over $50 billion more of U.S. oil, liquefied natural gas and other energy products over two years, according to the trade deal. U.S. Treasury yields rose slightly on the strong economic data and bank earnings.

The benchmark 10-year yield was up 1.2 basis points in morning trading at 1.8004%. Central banks were active, with both Turkey and South Africa cutting their interest rates again after policy meetings.

The European Central Bank published a largely upbeat set of meeting minutes ahead of a speech from its chief, Christine Lagarde.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)


TRENDING

OPINION / BLOG / INTERVIEW

China: A savior for emerging markets or a poison pill?

... ...

Future of Urban Planning: Artificial Intelligence guiding the way

Advances in emerging technologies like Artificial Intelligence and Machine Learning can help us understand our cities better and derive useful insights from real-time data collected through automated models....

Videos

Latest News

Motor racing-We would love to have Grosjean in IndyCar, says owner Coyne

IndyCar team Dale Coyne Racing said on Wednesday they would love to have out of work Formula One driver Romain Grosjean in a seat this season and hoped to confirm their lineup next week. After 10 seasons in Formula One, Grosjean was left wi...

US STOCKS-Stocks slump to worst day in three months in wake of Fed statement

U.S. stocks suffered their biggest one-day percentage drop in three months on Wednesday, adding to losses after the latest Fed statement as major indexes were also pressured by a slump in Boeing and a selling of long positions by hedge fund...

Reuters People News Summary

Following is a summary of current people news briefs. NBA Los Angeles mourns on first anniversary of Kobe Bryants deathFans of the late Kobe Bryant, who died a year ago to the day alongside his daughter and seven others when their helicopte...

Reuters Science News Summary

Following is a summary of current science news briefs. Drugs, vaccines less effective vs new virus variants antibody cocktail may protect patients contactsThe following is a roundup of some of the latest scientific studies on the novel coro...

Give Feedback