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Asian stocks track Brexit deal cheer but China caution prevails

SHANGHAI, Oct 18 — Asian stocks edged higher today, tracking the global lift in sentiment after the UK and the European Union struck a long-awaited Brexit deal, but concern about the Chinese economy is likely to cap gains with data expected to…


US homebuilding retreats, manufacturing still struggling

WASHINGTON, Oct 18 — US homebuilding tumbled from more than a 12-year high in September, but single-family home construction rose for a fourth straight month, suggesting the housing market remains supported by lower mortgage rates even as the…


US stocks gain on upbeat earnings, geopolitical news

NEW YORK, Oct 18 — Wall Street advanced yesterday as investor sentiment was buoyed by a string of corporate earnings beats and encouraging geopolitical developments. A broad-based rally led all three major US stock averages to moderate gains….


Stocks, sterling rise on long-awaited Brexit deal

LONDON, Oct 17 — A deal on Britain’s departure agreed with the European Union sent sterling to a five-month high today and hoisted European stocks to a year-and-a-half peak before doubts about UK parliamentary support hauled them back. Wall…


Europe’s Brexit deal cheers dampened by familiar snags

LONDON, Oct 17 — Confirmation of a new Brexit deal sent sterling to a five-month high on Thursday and hoisted European stocks to a year-and-a-half peak, before familiar doubts about British parliamentary support for the agreement hauled them back….


Wall Street opens higher on Brexit deal, earnings cheer

NEW YORK, Oct 17 — US stocks opened higher today, as worries over geopolitics eased after Britain struck a preliminary last-minute deal with the European Union, with sentiment also boosted by upbeat earnings from Netflix and Morgan Stanley. The…


Stock market tunes in to Netflix after subscriber bounce

NEW YORK, Oct 17 — Wall Street cheered a rebound in Netflix subscribers in the third quarter, driving shares in the firm 9 per cent higher today even as analysts warned conservative estimates for the next three months may be a hint of less certain…


Futures rise on Brexit deal; Netflix, Morgan Stanley earnings adds to cheer

NEW YORK, Oct 17 — Wall Street was set for a higher open today, after Britain struck a preliminary last-minute deal with the European Union helping to ease some geopolitical jitters, while upbeat earnings from Netflix and Morgan Stanley affirmed a…


US firms say near-term outlook dimming amid slow growth: Fed

WASHINGTON: Less than stellar US growth in recent weeks has caused many businesses to lower their outlooks and they now expect the economy to weaken, the Federal Reserve said Wednesday.

The Fed later this month is widely expected to cut interest rates for the third time this year as policymakers work to provide support for an economy that has begun to sag — even though for the moment it continues to outshine the rest of the industrialized world.

“The US economy expanded at a slight to modest pace… as business activity varied across the country,“ the central bank said in its beige book report on the economy.

“Business contacts mostly expect the economic expansion to continue; however many lowered their outlooks for growth in the coming six to 12 months.”

Most economists do not expect a recession in the next year but forecasting models still show the risk is increasing.

The hardships that manufacturing and agriculture face, according to the report, have not eased.

And elsewhere the picture has been uneven, though household spending has remained “solid,“ according to the Fed’s report, which gathers anecdotal accounts from around the country.

The mood was generally better in the southern and western regions of the country, while the Midwest and Great Plains — regions key to President Donald Trump’s election upset in 2016 — were gloomier, according to the Fed.

Hard to find workers

Oxford Economics said in a client note that the report was “lackluster” and pointed to more rate cuts from the central bank.

“We still expect two more rate cuts this year, in October and December,“ the firm said.

While US economic expansion is in a record 11th year and unemployment remains at 50-year lows, Fed members at their most recent meeting said they had become “more concerned” by mounting risks.

As the world economy begins to sputter, policymakers in recent weeks have said a clearer picture has emerged of the threat from President Donald Trump’s trade wars: Skittish companies, unsure of markets and prices, have held back on investment and could soon reduce hiring, which could then eat into consumer spending and growth.

But according to the beige book, for many employers the main barrier to more steady hiring remains the lack of available and qualified workers.

A major New York employment firm said “almost all job candidates are merely jumping from other jobs,“ the report said, while pressure to fill open positions in the Philadelphia region remained “acute.”

But among manufacturers, the labor shortage had a different effect. Rather than lay off employees who could be hard to replace, some firms reduced worker hours instead.

In the Boston region, “signs of slowing have become more widespread,“ while growth in the New York area “slowed to a subdued pace.”

Conditions improved in the Chicago and St Louis regions.

The early fallout from a month-long nationwide strike by UAW workers at General Motors plants “was limited,“ the Fed said.

Wall Street was largely unmoved by the report, finishing slightly lower after Commerce Department data showed weakening consumer demand in September. -AFP


Asian shares pause after 5-day rally, Brexit in focus

TOKYO/SYDNEY: Asian stocks barely moved on Thursday as soft U.S. retail sales data raised fears about the health of the world’s largest economy, sucking the steam out of a five-session rally, while hopes of a Brexit deal kept sterling volatile.

South Korean, Australian and New Zealand indexes were all in negative territory. Chinese shares were mostly flat while Japan’s Nikkei ticked up and U.S. stock futures were barely changed.

That left MSCI’s broadest index of Asia-Pacific shares outside Japan slightly higher with gains largely led by Hong Kong’s Hang Seng index.

The S&P 500 shed 0.20% on Wednesday after data showed U.S. retail sales contracted in September for the first time in seven months, in a potential sign that manufacturing-led weakness could be spreading to the broader economy.

“It looks like the trade war has claimed yet another victim, in addition to diminished business confidence and reduced investment spending, as consumers are starting to chicken out,“ said Chris Rupkey, chief financial economist at MUFG Union Bank.

Given U.S. consumption has been one of few remaining bright spots in the global economy, the data fanned worries the Sino-U.S. trade war would tip the world into recession.

U.S. Treasury Secretary Steven Mnuchin said on Wednesday that U.S. and Chinese trade negotiators were working on nailing down a Phase 1 trade deal text for their presidents to sign next month.

But he also said there were no plans for another high-level meeting on the trade deal outlined last week.

“While the U.S. suspended a hike in tariffs, it hasn’t gone as far as scrapping the tariffs altogether, so it is hard to expect a quick pick-up in the economy,“ said Yoshinori Shigemi, global market strategist at JPMorgan Asset Management.

Not for the faint-hearted

Losses in equities were somewhat offset by a solid start to the earnings season, though that is partly because investors have already marked down their expectations substantially. Earnings for S&P 500 companies are forecast to show a decline of 3% for the quarter, according to Refinitiv data.

Bank of America shares rose 2.0% following its quarterly results. Netflix rose 9.9% in after-hours trade after its earnings beat Wall Street estimates.

In the currency market, soft U.S. retail sales took the shine out of the dollar.

The dollar index was last at 98.005, having touched its lowest since Aug. 27 on Wednesday.

Against the yen, it was a flat at 108.73 after peaking at 108.90 on Tuesday.

The euro stood at $1.1074, near a one-month high of $1.1085 hit in U.S. trade on Wednesday.

Sterling traded at $1.2821, having risen to as high as $1.2877 on Wednesday, its loftiest since mid-May.

The pound has risen more than 5% in the past five sessions on hopes the United Kingdom and the European Union can strike a fresh deal in an EU leaders’ summit on Thursday and Friday.

Investors have welcomed optimistic comments from key officials in the last few days. British culture minister Nicky Morgan said late on Wednesday there is a good chance of a deal.

Still, many doubts remained, not the least of which is if British Prime Minister Boris Johnson can ensure his government and factious parliament approve the plan.

“Trading the British pound intra-day at the moment is not for the faint-hearted with deep pockets required,“ said Jeffrey Halley, senior market analyst at OANDA.

“The street clearly wants to take GBP higher on any Brexit hope, but traders should be aware that the pullback will be equally as ugly if progress stalls or collapses yet again.”

In commodities, oil prices slipped after industry data showed a larger-than-expected build-up in U.S. crude stocks, adding to concerns that demand for oil around the world may weaken amid further signs of a global economic slowdown.

Brent crude futures fell 0.47% to $59.14 a barrel while U.S. West Texas Intermediate (WTI) crude lost 0.7% to $52.98.

Spot gold was slightly weaker at $1,488.31 an ounce. -Reuters