European stocks dip, oil prices rise

LONDON — European stocks slid Monday as a positive lead from Asia on Chinese stimulus measures petered out, while oil prices continued their march higher.

Equities trading in the United States was closed for a public holiday.

"European markets have struggled for gains today in the absence of the US, as the initial boost of a China stimulus inspired rally from Asia markets has started to fade, even though basic resources have outperformed," said market analyst Michael Hewson at CMC Markets.

Data showing a jump in new home sales in China brightened sentiment in Asian trading as a sign that recent government measures to boost the struggling property sector were helping.

Investors are hoping for still more measures to stimulate the world's second largest economy after a number of announcements last week, including reducing mortgage down payments and tax incentives.

"While these individual easing measures may not appear substantial, their collective implementation clearly signals policymakers' intentions to stabilize the property market, spur economic growth, and boost overall sentiment," said SPI Asset Management's Stephen Innes.

"Further targeted measures are anticipated to be incrementally introduced until policymakers are content with the achieved results."

However, observers say that traders are yearning for the government to unveil a big-bang stimulus similar to the $550 billion seen in 2008 during the global financial crisis.

News that battered developer Country Garden had won approval from creditors to extend a deadline for a key bond repayment, narrowly avoiding a potential default, provided some much-needed relief from worries over China's property sector.

Meanwhile, oil prices pushed to or near to their highest levels this year on the prospect that Saudi Arabia and Russia will extend their production caps.

"The continued risk of a tighter market is helping to drive markets higher, raising the prospect that if Chinese demand does pick up in the second half of the year, prices could jump through $90 a barrel thus posing further upside risk to sticky inflation," said Hewson.

The main international contract, Brent crude, briefly hit $89 per barrel.

"That there is still plenty of momentum so close to $90 a barrel may suggest we could see a strong push to break above which would represent a big shift in the market dynamic in quite a short period of time," said Craig Erlam at OANDA trading platform.

Agence France-Presse

Global stock markets slump after US ratings downgrade

NEW YORK — Global stock markets slumped Wednesday after Fitch stripped the United States of its top credit rating, citing a growing federal debt burden and an "erosion of governance."

Fitch's decision Tuesday night to downgrade the United States from AAA to AA+ sparked a fiery rebuttal from the Biden administration.

Treasury Secretary Janet Yellen characterized Fitch's move as "entirely unwarranted," calling it "puzzling in light of the economic strength we see in the United States."

Wall Street's main indices moved lower, with the S&P 500 finishing down 1.4 percent.

Europe's main markets closed with losses of more than one percent.

"Market participants were already contending with the nagging notion that the stock market was overbought on a short-term basis and due for a pullback," said market analyst Patrick O'Hare at Briefing.com.

"It didn't necessarily need another excuse to continue with a consolidation trade, yet Fitch Ratings provided one after Tuesday's close when it downgraded its US credit rating to AA+ from AAA."

Ratings downgrades often mean it becomes more expensive for a government to borrow, but the status of US government bonds, or Treasuries, as a highly liquid safe-haven asset actually saw their yield dip immediately after the announcement.

The yield on 10-year bonds later rose in trading on Wednesday, which traders said was more due to expectations of higher volumes of US borrowing than the Fitch downgrade.

DOWNGRADE 'CHANGES LITTLE' 

Stephen Innes, managing partner at SPI Asset Management, said the downgrade will be "unlikely" to "cause a significant Treasuries sell-off or prompt a major shift in investor behavior mainly because investors experienced a similar downgrade from S&P in 2011 and came away unscathed."

Michael Hewson, chief market analyst at CMC Markets UK, agreed the impact would be minimal.

"The loss of the AAA rating is damaging from a political point of view, but it changes little in the wider scheme of things when it comes to the investability of the US relative to its peers," he said.

"It’s not as if China, or any other country in Europe is any safer when it comes to investability, as well as political stability."

The downgrade follows a long, drawn-out row between Republicans and Democrats earlier this year over raising the US borrowing ceiling, which had fueled fears of a devastating default by the world's top economy.

While a deal was eventually struck, the saga rattled markets and reinforced the sense of long-running deadlock on Capitol Hill that has seen the gears of government jammed up.

In an interview with CNBC, Fitch Ratings senior director Richard Francis pointed to a "pretty steady deterioration in governance over the last couple of decades" in the United States.

Among the elements he highlighted was January 6, referring to the date in 2021 when supporters of Donald Trump stormed Congress in a bid to prevent certification of his rival Joe Biden's election victory.

Other factors, he added, included "constant brinksmanship surrounding the debt ceiling" along with Republicans and Democrats' inability to generate "meaningful, long-term solutions" on fiscal issues surrounding programs like social security and Medicare.

Agence France-Presse

European stock markets surge on vaccine hopes

LONDON - European stock markets surged Monday on hopes of a coronavirus vaccine, while the dollar waned on the continued deadlock over a new US stimulus deal, dealers said.

Looking ahead to a key meeting of central bankers this week, traders sent London's benchmark rallying 2.0 percent and major eurozone indices were almost 2.5-percent higher approaching the half-way stage. 

American authorities on Sunday announced that doctors could use blood plasma from recovered coronavirus patients as a treatment against the disease that has killed more than 176,000 in the US.

The move by the Food and Drug Administration comes as President Donald Trump faces intense pressure to curb the contagion that has hobbled the world's largest economy and clouded his once-promising prospects for re-election in November.

"European markets have kicked off the week in style, with the FDA's decision to approve the convalescent plasma coronavirus treatment raising hopes that we could see a vaccine fast-tracked before long," said Joshua Mahony, senior market analyst at IG trading group.

Hong Kong's main stock index meanwhile led gains across Asia, rallying 1.7 percent with traders cheered by a pledge from China's banking regulator that it would continue to back the city as a financial hub after concerns were raised following the imposition of a new security law last month.

Investors will this week be keeping an eye also on a virtual gathering of central bankers at Jackson Hole, Wyoming, for monetary policy guidance after they have already provided already a wall of cash to support the global economy during the pandemic.

The main attraction is a speech by Federal Reserve chief Jerome Powell that is slated to take place on Thursday.

"More clarity will no doubt be sought via this week's Jackson Hole symposium," said Ben Emons, of Medley Global Advisors.

Traders are additionally keeping tabs on Washington, where US lawmakers are struggling to reach an agreement on a fresh stimulus package for the American economy.

"Democrats and Republicans are still very far (from) reaching a deal, and this means no further immediate aid in terms of fiscal policy," said Naeem Aslam, chief market analyst at Avatrade.

"Investors will like to know how the Fed will use language to make politicians understand in Washington about the importance of another stimulus package."

Agence France-Presse

World stocks slip as growth fears linger; euro slides

NEW YORK -- The dollar rose to almost a two-year high against the euro on Thursday on an upbeat US capital goods report, while world equities slid as weak economic data from South Korea and a profit warning from 3M Co renewed concerns about global growth.

New orders for US-made capital goods increased by the most in eight months in March, which combined with worries about the economic health of the euro zone knocked the single currency to its lowest against the greenback since May 2017.

Other data showed the number of Americans filing claims for unemployment benefits last week was the biggest in 19 months, but the trend remains consistent with a strong labor market.

"The dollar is benefiting from strong domestic data, weak data abroad and a slew of dovish central bank meetings," said John Doyle, vice president of dealing and trading at Tempus Inc in Washington.

The euro fell 0.19 percent to $1.1131, while European shares slid after a mixed bag of earnings from the region.

Finnish telecom network equipment maker Nokia tumbled 9 percent, its biggest decline in 18 months. Nokia reported a surprise quarterly loss after it failed to supply 5G telecoms equipment on time.

The pan-European STOXX 600 index closed down 0.21 percent and MSCI's gauge of stock performance in 47 countries shed 0.25 percent.

On Wall Street, strong results from Facebook and Microsoft Corp lifted the tech-heavy Nasdaq to a new intra-day record but were offset by dismal earnings in industrials, including 3M and United Parcel Service Inc .

UPS fell 8.1 percent and the industrial sector slid 2 percent, while Facebook gained 5.8 percent and Microsoft Corp rose 3.3 percent.

The Dow industrials fell 1 percent at one point, dragged down by a 13 percent plunge in 3M shares after the company reported a lower-than-expected quarterly profit, cut its 2019 earnings forecast and said it would lay off 2,000 workers globally.

The Dow Jones Industrial Average fell 134.97 points, or 0.51 percent, to 26,462.08. The S&P 500 lost 1.08 points, or 0.04 percent, to 2,926.17 and the Nasdaq Composite added 16.67 points, or 0.21 percent, to 8,118.68.

Asian markets slid earlier in the day, losing 0.5 percent as South Korea's economy unexpectedly contracted in the first quarter, a reminder of economic fragility outside the United States.

Shanghai's bourse also fell late in the day, losing more than 2 percent on the latest central bank efforts to temper expectations for further monetary policy easing.

Chinese officials also warned of protracted pressure on economic growth, casting a shadow over hopes for a sustained recovery in the world's second-biggest economy.

The dollar index, which measures the greenback versus a basket of six major peers, held near its highest level since May 2017. The index was up 0.1 percent.

The Japanese yen strengthened 0.48 percent versus the greenback at 111.63 per dollar.

The Turkish lira weakened 0.95 percent against the dollar after Turkey's central bank left interest rates unchanged at 24 percent but in a dovish shift dropped a previous reference to possible further tightening if needed to address inflation.

US Treasury yields rose as investors piled into the safe-haven government bonds following a dovish report from Canada's central bank and solid demand at auction for $41 billion of new five-year notes.

Benchmark U.S. Treasury 10-year notes fell 3/32 in price to push yields up to 2.5343 percent.

Oil prices eased after Brent touched $75 per barrel for the first time in nearly six months on the suspension of some Russian crude exports to Europe.

Brent crude futures settled down 22 cents at $74.35 a barrel. U.S. crude fell 68 cents to settle at $65.21.

US gold futures settled unchanged at $1,279.70 an ounce.

source: news.abs-cbn.com

European shares rise on Brexit vote delay, Wall Street little changed

NEW YORK -- A gauge of global equity markets traded little changed on Thursday as European shares rose ahead of new voting that backed a Brexit delay and bolstered the dollar, while Wall Street meandered on uncertainty over US-China trade talks.

The dollar gained for the first time in a week as the pound fell even after Parliament voted overwhelmingly to seek a delay to the March 29 deadline for Britain to exit the European Union.

Lawmakers also voted against a second referendum on EU membership as the delay vote set the stage for Prime Minister Theresa May to renew efforts to get a divorce deal approved by Parliament next week.

Sterling fell 0.86 percent to $1.3222 after gaining almost 2 percent late on Wednesday on a vote to defeat a "no-deal" Brexit.

Uncertainty about Brexit favored waiting for some clarity in the market as there was a lack of conviction, said Charles Tomes, senior investment analyst at Manulife Asset Management.

"Volatility is low and people don't want to put on sizeable positions either way," Tomes said.

European shares rose to a five-month high as sentiment improved from cautious to upbeat after the open. But a Bloomberg report of a likely delay in US-China trade talks, coupled with fresh data showing weak US home sales, hurt US stocks.

Data showing China's industrial output grew 5.3 percent in January and February, the slowest pace of expansion in 17 years, is also a concern, said Kristina Hooper, chief global market strategist at Invesco.

While fiscal and monetary stimulus will improve China's economy down the road, fear of US-China trade wars and economic slowdown are driving market sentiment for the moment.

"In general, what we have is a picture that doesn't look particularly positive today," Hooper said.

MSCI's gauge of stocks across the globe shed 0.03 percent while the FTSEurofirst 300 index of leading European shares closed up 0.77 percent.

On Wall Street, the Dow Jones Industrial Average rose 7.05 points, or 0.03 percent, to 25,709.94. The S&P 500 lost 2.44 points, or 0.09 percent, to 2,808.48 and the Nasdaq Composite dropped 12.50 points, or 0.16 percent, to 7,630.91.

The dollar index, a gauge of its strength against six other major trading currencies, rose 0.24 percent to 96.783 after brushing a nine-day trough overnight of 96.385.

The euro fell 0.2 percent to $1.1302, and the Japanese yen weakened 0.46 percent versus the greenback at 111.70 per dollar.

US Treasury prices dropped in quiet trading.

The benchmark 10-year note fell 5/32 in price to push its yield to 2.6285 percent.

Oil prices were mixed, lifted by solid demand and output cuts led by the Organization of the Petroleum Exporting Countries, though gains were capped by an ongoing surge in US supply while analysts warned of risks to the global economy.

US West Texas Intermediate (WTI) crude oil futures rose 35 cents to settle at $58.61 per barrel, but Brent crude futures settled down 32 cents at $67.23 per barrel.

Gold slipped below $1,300 for a second time this month as the dollar gained and British lawmakers approved a Brexit delay.

US gold futures settled 1.1 percent lower to $1,295.1 an ounce.

source: news.abs-cbn.com

US, European stocks mostly rebound from prior session selloff

NEW YORK - US and European stocks mostly rose Wednesday as investors took a more optimistic stance on the Italian political crisis that sent them fleeing in the prior session.

The crisis in Italy continued to hover, with anti-establishment leader Luigi Di Maio seeking to resurrect a populist coalition that collapsed at the weekend by offering the president a compromise over a controversial pick for economy minister.

Yet investors adopted a more benign view of the situation, bidding up shares that tumbled in Tuesday's session on what-ifs that included a eurozone implosion or widespread defaults.

"Yesterday was a bit overdone," said Nathan Thooft of Manulife Asset Management.

"The reality is that the Italian political dynamics aren't going to be solved any time soon," he said. "The market today is realizing we don't really know what the outcomes are going to be but we are not going to bet on the worst-case scenario."

Ian Shepherdson of Pantheon Macroeconomics struck a similar note, rejecting worries that Italy could leave the eurozone.

"In the long run, anything can happen, given the massive fundamental structural flaws in the construction of the euro, but we detect no great wave of anti-euro sentiment in Italy, and the elections likely to take place in the summer probably won't deliver a clear mandate to exit the single currency," he said in a research note.

"It's not even clear that any of the parties likely to attract significant support will campaign on a platform of euro exit."

The broad-based S&P 500 climbed 1.3 percent, boosted by a strong performance in banking shares and in energy companies that benefited from higher oil prices.

European stocks also had a fairly good day, with Milan itself winning 2.1 percent. London and Frankfurt both rose, although Paris finished slightly lower.

The euro climbed back from the 10-month lows against the dollar it had fallen to on Tuesday. 

A main focus in the days ahead will be the US jobs report for May released on Friday.

Payrolls firm ADP estimated US private sector job growth at 178,000 in May, down from the 204,000 in April and a bit below analyst expectations.

A Federal Reserve's "beige book" survey of economic conditions described companies as largely optimistic, despite worries about a trade war and growing labor shortages.

Economic activity expanded moderately in late April and early May," and businesses are "generally upbeat" about growth in the near term, the 12 Federal Reserve districts reported.

KEY FIGURES AROUND 2100 GMT (5 a.m. Thursday in Manila)

New York - Dow Jones: UP 1.3 percent at 24,667.78 (close)

New York - S&P 500: UP 1.3 percent at 2,724.01 (close)

New York - Nasdaq: UP 0.9 percent at 7,462.45 (close)

Milan - FTSE MIB: UP 2.0 percent at 21,797.82 (close)

London - FTSE 100: UP 0.7 percent at 7,689.57 (close)

Paris - CAC 40: DOWN 0.2 percent at 5,427.35 (close)

Frankfurt - DAX 30: UP 0.9 percent at 12,783.76 (close)

EURO STOXX 50: UP 0.1 percent at 3,430.93 (close)

Tokyo - Nikkei 225: DOWN 1.5 percent at 22,018.52 (close)

Hong Kong - Hang Seng: DOWN 1.4 percent at 30,056.79 (close)

Shanghai - Composite: DOWN 2.5 percent at 3,041.44 (close)

Euro/dollar: UP at $1.1664 from $1.1540

Pound/dollar: UP at $1.3281 from $1.3249

Dollar/yen: UP at 108.91 yen from 108.77 yen

Oil - Brent Crude: UP $2.11 at $77.50 per barrel

Oil - West Texas Intermediate: UP $1.48 at $68.21 per barrel

source: news.abs-cbn.com

Asian stocks catch a lift from Wall Street, Europe

TOKYO/SINGAPORE - Asian shares caught a tailwind on Wednesday after upbeat German economic data powered gains in U.S. and European markets, while the safe-haven yen skidded as investors' mood turned positive.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 2.5 percent by 0250 GMT, with gains across all the major indices that were open.

Japan's Nikkei soared 5.7 percent, on track for its biggest one-day rise since March 2011. In the previous session, it lost 2.4 percent and wiped out its year-to-date gain.

Major Wall Street indices all logged gains of more than 2 percent overnight.

European stocks also had a banner day on news Germany's imports and exports hit record highs in value terms in July.

Chinese shares rose late on Tuesday after digesting a bigger-than-expected drop in imports. The trade data raised fears that China's slowdown could be sharper than many had expected, which in turn raised hopes that Beijing would muster more easing steps to prevent a hard landing.

The Shanghai Composite index climbed 1.7 percent on Wednesday. Hong Kong's Hang Seng index added 2.7 percent.

"With many markets having been sold off heavily over recent weeks, today’s rally, like the U.S. last night, represents a speculative bounce," said Angus Gluskie, managing director of White Funds Management in Sydney.

"The market will remain susceptible to a return of negativity until we see signs of some improvement in the original causes of weakness, which were predominantly Chinese growth concerns," he said.

The dollar put in a mixed performance, slipping slightly against a basket of six rival currencies to 95.945, and against the euro to $1.1191.

But the greenback firmed about 0.5 percent against the yen to 120.25 as the improved market mood sapped some of the appeal of the perceived safe-haven Japanese currency.

The euro also gained on the yen, rising 0.3 percent to 134.56.

Crude oil futures remained steady but at low levels on lingering concerns about a global supply glut.

U.S. crude rose 0.2 percent to $46.15 ahead of weekly crude inventories data due from industry group American Petroleum Institute later in the session.

Brent crude rose 0.4 percent to $49.74, after jumping 4 percent the previous session following upbeat German economic data.

source: www.abs-cbnnews.com

Global stocks, dollar rebound but China smashed again

LONDON - Volatile global markets got some respite from the latest blood-letting on Tuesday as bargain hunters nudged up Asian and European stocks, though China, at the center of the rout, was smashed again.

The dollar and oil prices saw their first rises in five days and some of the positions in safe-haven bonds and currencies such as the yen and the euro were also cut as investors nervously dipped their toes back in the still choppy waters.

China's main equity markets had seen another huge 8 percent drop overnight and Japan's Nikkei had slumped 4 percent, but the rest of Asia had been calmer overall.

Europe also started on a firmer footing after Monday's global beating had wiped around 450 billion euros ($520.70 billion) off the value of its leading stock markets.

The pan-European FTSEurofirst 300 index clawed back 1.7 percent of the more than 5 percent it had lost as London, Paris and Frankfurt bounced 1.5-1.7 percent.

"We are seeing signs of relief with European stocks opening higher despite China extending its losses," said Piotr Matys, an emerging markets expert at Rabobank in London.

"We are trying to decouple but I think it's too early to declare the worst is over though and we are out of the woods. The way I see it is that this is a bit of a technical correction after things got a bit oversold."

The currency market was also calmer. The dollar rose against the yen as it pulled out of a four-day long slide that had left it at a seven-month low.

Traders said a rise in U.S. stock index futures and a brief rebound in Japanese stocks had helped spur dollar-buying against the yen earlier in the day, with the dollar rising to 120.11 yen at one point.

German Bund and other euro zone government bond yields also rose along with those on U.S. Treasuries as the previous day's rush for safety eased, although it was far from plain sailing.

Mainland Chinese shares had another calamitous day, with the Shanghai Composite Index falling another 8 percent and breaking below the psychological level of 3,000. The index fell 15 percent the previous three days, including an 8.5 percent collapse on Monday.

"Global investors are cannibalizing each other. Calling it a market disaster is not an overstatement," said Zhou Lin, an analyst at Huatai Securities.

"The mood of panic is dominating the market ... And I don't see any signs of meaningful government intervention."

Oil prices also stabilized, however, after plunging more than 6 percent and hitting 6 1/2-year lows.

U.S. crude futures traded at $38.73 per barrel, up 1.2 percent on the day, while Brent crude futures last stood at $43.03 after having fallen to $42.23 on Monday. Copper nudged up a fraction too to $4,956 a tonne.
source: www.abs-cbnnews.com