equity markets


Asian markets mixed after Fed minutes, eyes on Powell

HONG KONG, Aug 22 — Asian markets stuttered today but dealers remain wary following the release of Federal Reserve minutes that provided a mixed bag, with a speech by its chair at the end of the week the key point of focus. Donald Trump provided…

US stocks rise despite more bond yield turmoil, Europe also higher

NEW YORK: Wall Street stocks resumed their upward climb Wednesday, shrugging off a key warning sign in the Treasury bond market and barreling higher following strong results from retailers.

US stocks finished with solid gains for the third out of four sessions on a day in which European bourses also rallied.

Wall Street was in positive territory the entire day and did not move appreciably near the end of the session, when yields on the two- and 10-year Treasury notes, a harbinger of past recessions and a trigger for a major selloff earlier this month.

Strong earnings from US big-box chains Target and Lowe’s, coupled with other good US retail sales reports, “helped mitigate the ‘recession fear’ communicated previously on the first inversion of the 2s10s spread, because they underscored for the market that the US consumer is still in good shape,” said Briefing.com analyst Patrick O’Hare in an email.

Investors believe the flattening or inversion has been precipitated other factors in Europe and Japan rather than “by a trade of true economic angst pertaining to near-term economic prospects for the US.”

A strong indicator of US consumer resilience was a blowout earnings report from Target, Walmart’s smaller rival, which surged more than 20 percent after reporting higher profits on increased sales and consumer traffic.

“With both Target and Walmart producing good sets of numbers, the middle American consumer is clearly alive and well,” said GlobalData Retail analyst Neil Saunders.

Minutes from the Federal Reserve’s July 30-31 policy meeting said the US central bank will remain flexible and interest rates will not be on a “preset course” in the face of persistent risks from trade uncertainty and weak global growth.

On July 31, policymakers cut the key interest rate for the first time in more than a decade, a move characterized in the minutes as “part of a recalibration… or mid-cycle adjustment.”

The minutes “didn’t dissuade investors from the concept that the Fed might be lined up to cut rates again at some point this year,” said Art Hogan chief market strategist at National Securities.

The minutes come ahead of a much-anticipated appearance Friday by Fed Chair Jerome Powell at an annual central bank gathering in Jackson Hole, Wyoming.

Short-lived crisis?

Key European equity markets climbed more than one percent.

That included Milan’s FTSE MIB index which rallied as Italian President Sergio Mattarella began talks with key players in a bid to end political limbo in the eurozone’s number three economy.

The index had dived 1.1 percent on Tuesday after the shock resignation of prime minister Giuseppe Conte.

Investors appeared to believe the crisis would be short-lived with the much-watched gap between German and Italian bond yields shrinking, indicating the markets do not perceive significant risk at this stage.

“If they manage to form a new government, it would be welcomed with some caution by other EU leaders who might see it as an opportunity to avoid a showdown over Italy’s budget in the next few months,” said the director of Future Europe Initiative, Benjamin Haddad.

VTB analyst Neil MacKinnon was more downbeat. “There is an increasing risk of a fresh eurozone debt and banking crisis,” he cautioned. – AFP

Oil prices slip, but supported by hopes trade tensions could ease

SINGAPORE: Crude oil prices slipped on Tuesday, but losses were limited as equity markets rallied and as traders hoped Sino-U.S. trade tensions would ease.

The United States said it would extend a reprieve that permits China’s Huawei Technologies to buy components from U.S. companies, in a sign of a slight softening of the trade war between both countries.

Brent crude had slipped 3 cents, or 0.05%, to $59.71 a barrel by 0147 GMT, after rising 1.88% on Monday.

U.S. crude was down 15 cents, or 0.3%, at $56.06 a barrel, after gaining 2.44% in the previous session.

The extension sets a very “comforting tone” ahead of next month’s U.S.-China trade talks, Stephen Innes, managing partner, VM Markets, said in a note.

“The U.S.-China trade spat has been at the centre of the oil market demise, which has sent the global economy to the brink of recession and negatively impacted oil demand forecasts,” he said.

A rally in equity markets around the world from growing expectations that global economies would take action to counteract slowing growth also supported oil prices, which often follow stocks.

China’s central bank unveiled interest rate reforms which are expected to lower corporate borrowing costs, while Germany’s right-left coalition government said it would be prepared to ditch its balanced budget rule and take on new debt to counter a possible recession.

Meanwhile, a Reuters poll of seven analysts showed that crude oil inventories in the United States fell by 1.9 million barrels in the week to Aug. 16.

The poll was conducted ahead of reports from the American Petroleum Institute (API), an industry group, and the Energy Information Administration (EIA), an agency of the U.S. Department of Energy.

The API is scheduled to release its data on Tuesday.

Still, prices were weighed down by a report from the Organization of the Petroleum Exporting Countries (OPEC) that stoked concerns about growth in oil demand.

OPEC cut its forecast for global oil demand growth in 2019 by 40,000 barrels per day (bpd) to 1.10 million bpd and indicated the market would be in slight surplus in 2020.

Traders were also watching for signs of tension in the Middle East after the U.S. called the release of an Iranian tanker at the centre of an angry confrontation between Iran and Washington unfortunate and warned Greece and Mediterranean ports against helping the vessel. – Reuters

Ringgit ends slightly higher

KUALA LUMPUR: The ringgit ended slightly higher against the US dollar today, tracking global cues on hopes that major economies will launch stimulus measures to counter a global economic slowdown.

At 6pm, the ringgit finished at 4.1750/1790 against the greenback from 4.1760/1810 on Friday.

Chief market strategist at FXTM Hussein Sayed said investors are counting on central banks to save the global economy and equity markets from further turbulence.

“If central banks prove they’re ready to act by delivering interest rate cuts and new quantitative easing programmes, expect equity markets to resume their rally after their recent plunge.

“Otherwise, expect more money to pour into gold and other safe havens such as the Japanese yen and Swiss franc,“ he added.

He said all eyes are on Thursday’s Jackson Hole annual meeting at Wyoming, where leaders from major central banks gather for more market clues amid the current volatile markets.

Against other major currencies, the ringgit was traded mixed.

The ringgit was better against the Japanese yen at 3.9183/9228 from 3.9230/9288 last Friday, and against the British pound at 5.0593/0645 from 5.0763/0828.

It weakened against the Singapore dollar to 3.0144/0184 from 3.0097/0140 last Friday and versus the the euro to 4.6338/6399 from 4.6283/6346. — Bernama

Stimulus hints drive European stocks higher

BERLIN, Aug 19 — European stock markets rose for the second session running today, with Frankfurt shares leading a recovery from last week’s six-month lows as investors cheered signs of moves by Germany and China to counter slowing growth….

Bursa Malaysia continues decline, marking sixth week of losses

KUALA LUMPUR, Aug 19 — Bursa Malaysia continued its decline last week, marking the sixth week of losses last seen in May to June 2015, in line with performances of regional peers, said MIDF Amanah Investment Bank Bhd Research.  In the weekly…

Asia stocks gain as China rates tweak lifts investor mood

TOKYO, Aug 19 — Asian stocks tracked the Wall Street rally today and found an extra tailwind from a move by China’s central bank to change the way a key interest rate benchmark is set, seen by analysts as reducing borrowing costs for companies….

Asian markets rally on fresh hopes for trade talks

HONG KONG: Asian markets rallied Monday following a strong lead from Wall Street and comments from Donald Trump’s top economic adviser hailing “positive” trade talks with top Chinese negotiators.

Optimism that central banks will provide fresh support to head off a global economic recession has also lent much-needed support to regional equities after last week’s sell-off, with eyes on an upcoming speech by Federal Reserve boss Jerome Powell for clues about its plans.

Investors were in an upbeat mood after White House chief economic adviser Larry Kudlow said that if talks between deputies from Beijing and Washington went well and “we can have a substantive renewal of negotiations” then “we are planning to have China come to the USA and meet with our principals to continue the negotiations”.

He added that high-level phone talks last week were “a lot more positive than has been reported”.

Trump provided further cause for hope by tweeting: “We are doing very well with China, and talking!”

Kudlow also raised the prospect of using cash taken from higher tariffs on Chinese goods to pay for tax cuts.

White House recycling

“This sort of recycling won’t clear the oceans of plastic or reduce global warming, but it is an elegant solution to reducing the pain of tariffs on the American consumer of China and may give equity markets a small boost as we start the week,” said Jeffrey Halley, senior market analyst for Asia-Pacific at OANDA.

The remarks helped Asian traders build on New York’s rally.

Hong Kong led gainers, surging 1.8 percent with dealers also cheered by three days of protests in the city not descending into violence.

Shanghai rose 0.6 percent and Tokyo added 0.5 percent by the break.

Sydney climbed 0.8 percent, Singapore put on 0.3 percent and Seoul jumped 0.5 percent with Wellington, Taipei and Jakarta in positive territory.

There remains a high level of concern about the global outlook and particularly the US economy after yields on 10-year US Treasury bonds slid last week below that of the two-year note, while the 30-year yield fell below two percent for the first time ever.

The so-called “inversion” — when short-term interest rates are higher than longer-term ones — is viewed as a harbinger of recession.

But investors are hopeful that authorities will unveil stimulus to limit any impact. Germany’s Der Spiegel said Angela Merkel’s government was ready to boost public spending, while China announced an interest rate reform that it said would lower borrowing costs for companies. – AFP

Asia stocks rise as stimulus, policy hopes calm nervous investors

TOKYO, Aug 19 — Asian stocks rose today as hopes of more stimulus from central banks around the world and steps being taken by major economies such as Germany and China soothed investors’ fears of a sharp global economic slump. Over recent…

Dollar firms, stocks soar on ECB rate cut expectations

NEW YORK, Aug 17 — US and European stocks surged on Friday on expectations the European Central Bank will cut interest rates but the dollar pared gains against the euro after a report said the German government was prepared to take on new debt to…