Stocks turn higher, pound rallies on Brexit deal


  • Economy
  • Thursday, 17 Oct 2019

LONDON: US equity-index futures turned higher with European stocks on Thursday as a new Brexit deal was announced and investors digested a string of corporate results. The pound surged.

The Stoxx Europe 600 Index had been fluctuating before news of the deal broke, but it jumped as every major national gauge advanced. Earnings in the region had been mixed, with Unilever saying growth fell short of estimates while Nestle announced a buyback. Ericsson boosted its sales target for next year.

Futures for the three main U.S. equity gauges joined the rally and Netflix gained in early trading thanks to upbeat results on Wednesday. Treasury and European bonds retreated. Crude oil erased an earlier decline.

As the earnings season ramps up and trade worries continue to keep investors on their toes, Wednesday’s data on American retailers may have tilted the scales in favor of a Fed rate cut this month for any hesitant policy makers. The Fed Beige Book said the U.S. economy expanded at a "slight to modest pace” in recent weeks, representing a mild downgrade.

The trade truce "is just temporary and until there is some sort of signed document or some sort of resolution, I think the market will remain skittish, nervous, and there will be pessimism, ” Marc Pfeffer, chief investment strategist at CLS Investments LLC, told Bloomberg TV. "That’s going to put a cap right now on any upside to the market.”

Earlier in Asia, stocks fell in Tokyo, Sydney and Seoul, rose in Hong Kong and were barely changed in Shanghai. Taiwan Semiconductor, the primary chip supplier to Apple, projected current-quarter revenue ahead of analysts’ estimates. The Australian dollar strengthened after the country’s jobless rate unexpectedly fell and full-time employment climbed.

Here are some key events coming up this week:

China releases third-quarter GDP, September industrial production and retail sales data on Friday.

Here are the main movers in markets:

Stocks

Futures on the S&P 500 Index climbed 0.4% as of 10:40 a.m. London time.The Stoxx Europe 600 Index rose 0.2%.The U.K.’s FTSE 100 Index gained 0.2%.The MSCI Asia Pacific Index increased 0.1%.The MSCI Emerging Market Index jumped 0.6%.Currencies

The Bloomberg Dollar Spot Index declined 0.4%.The euro rose 0.5% to $1.1129.The British pound climbed 0.8% to $1.2934.The Japanese yen dipped 0.1% to 108.92 per dollar.Bonds

The yield on 10-year Treasuries gained four basis points to 1.78%.Germany’s 10-year yield rose four basis points to -0.35%.Britain’s 10-year yield increased one basis point to 0.716%.Commodities

Gold declined 0.3% to $1,485.65 an ounce.West Texas Intermediate crude dipped 0.2% to $53.25 a barrel. - Bloomberg


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