Global Stocks Lifted by Hopes of More Easy Money

◊ Global Stocks – StockMarketNews.Today

U.S. stock futures followed European shares higher amid hopes for continued support to the economy from central banks and governments.

Futures on both the S&P 500 and the Dow Jones Industrial Average were up 0.2%.

The Stoxx Europe 600 rose 0.5% in midday trade, with the U.K.’s FTSE 100 up 1.1% after a Bank of England official said an interest-rate cut could be needed even if a Brexit deal is agreed. The British pound slipped 0.3% against the dollar.

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The German DAX was up 0.9% and France’s CAC 40 rose 0.2%. France on Thursday unveiled tax cuts on business and individuals in an effort to boost its economy.

Meanwhile, markets were watching for comments later Friday from European Central Bank chief economist Philip Lane for clues about the direction of policy.

Daniel Morris, a senior investment strategist at BNP Paribas Asset Management, flagged U.S. personal consumption expenditure as a key figure to look out for later in the day.

“If it’s reasonably strong then the Fed may be right,” Mr. Morris said, noting it would suggest that, in contrast to the market’s view, the central bank been cutting interest rates by the right amount.

Investors will also be watching for U.S. orders of durable goods. Analysts are forecasting a 1% decline month-on-month.

The yield on U.S. 10-year Treasurys inched up to 1.723%, from 1.685% on Thursday. Bond yields and prices move in opposite directions.

Stocks closed broadly lower in Asia, with Tokyo’s Nikkei down 0.8% and Hong Kong’s Hang Seng down 0.3%. Shares in Shanghai were an outlier, edging up 0.1%.

Chinese industrial profits slipped 2% in August from the year before, after rising 2.6% in July, China’s National Bureau of Statistics said Friday. Producer-price deflation deepened last month, ratcheting up the pressure on manufacturers that were already struggling with the prolonged trade war between China and the U.S., official data showed earlier.

In commodities, Brent crude futures slipped 0.3% after Saudi Arabia said exports would soon return to normal after attacks on facilities earlier this month.

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“Strong inventories, ongoing demand concerns, and a perceived fast ramp-up of lost Saudi production have overshadowed geopolitical risks for now,” said Balint Balazs at Schneider Electric.

The European Commission released data Friday that showed business expectations for factories in the eurozone had become more negative than any other time in the last six years. The slump was particularly pronounced in Germany and Italy, the large eurozone economies that rely most on exports of goods to drive economic growth.

Analysts at Dutch bank ING in a note called the sentiment figures dismal. “This provides a clear indication that an end to the industrial slump is not yet in sight,” they said.

The analysts said that while improving service-sector sentiment provided a silver lining, the message from short-term indicators was troubling.

Luis Costa, head of foreign exchange strategy at Citibank, said the relative strength of the U.S. economy has helped keep the dollar up against other currencies.

The WSJ Dollar Index, which measures the currency against a basket of its peers, was unchanged. Traditional haven gold slipped 1.1%.

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Analysts at UniCredit said traders are torn between a positive outlook for a U.S.-China trade deal and worries about the political situation in Washington.

Later in the day, investors will be watching for comments from Federal Reserve Vice Chair Randal Quarles for hints at future policy.



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