Global stocks climb on Thursday amid raising hopes for interest rates cuts by the Federal Reserve. Last night, Wall Street indexes rose to record highs and the S&P 500 even surpassed the threshold of 3,000 points for a while.
Asian markets closed the session into the green and the positive sentiment moved to Europe, where the equities are trading mostly with gains.
While strong US jobs data last week had investors trimming bets of 50 basis points cut in interest rates by the Fed in July, Powell’s remarks saw interest rate futures pricing in greater odds of an aggressive rate cut this month. Powell told the House Financial Services Committee in prepared testimony on Wednesday that the central bank will “act as appropriate” to sustain expansion as “crosscurrents” are weighing on the economic outlook.
Meanwhile, the US Trade Representative Robert Lighthizer said Wednesday that President Donald Trump has ordered a probe into whether France’s planned “digital services” tax is an unfair trade practice that targets US tech giants.
Asian markets recap
The main stock indexes in the Asia-Pacific region ended the trading session into the green after the US Federal Reserve Governor Jerome Powell signaled on Wednesday for a possible cut in key interest rates at the end of the month.
In China, the mainland index Shanghai Composite advanced by 0.04% to 2,916.49 points. Hong Kong’s benchmark Hang Seng rose by 209.38 points, or 0.74%, to 28,414.07 points.
The Japanese index Nikkei 225 added 110.05 points, or 0.51%, to 21,643.53 points. The shares of the video game maker Nintendo rose by more than 3.5% after the company presented a cheaper version of the console Switch. Switch Lite will be sold for 199.99 USD, or 100 USD less than the original device. The new console will be released on September 20 and will appear in yellow, gray and turquoise.
In South Korea, the local index Kospi rose by 1.06% to 2,080.58 points. The political tensions between Tokyo and Seoul continue to fade after Japan last week said it would tighten restrictions on exports to South Korea of three important materials used in smartphone displays and chips. On Thursday, South Korea said it would allocate 300 billion KRW (256 million USD) to tackle the effect of Japanese export restrictions. The shares of companies that are potentially affected by restrictions, such as Samsung Electronics and SK Hynix, rose by 2.09% and 2.88%, respectively.
In Australia, the local index S&P ASX 200 advanced by 0.39% to 6,716.10 points.
European markets mid-session recap
European stocks traded higher Thursday morning after US Federal Reserve Chairman Jerome Powell signaled that the central bank could soon cut interest rates. The pan-European Stoxx 600 climbed 0.3% to 388.32 points with oil and gas leading gains with a 1.2% rise while only autos and chemicals traded in the red.
German index DAX 30 edged higher by 22.79 points, or 0.18%, to 12,396.20 points at 09:45 GMT. The stocks of Deutsche Bank are down by 0.2% after the shareholders received the opportunity to grill CEO Christian Sewing on how he plans to deliver on the German lender’s revenue growth targets during a global roadshow. Sewing is seeking shareholder backing for a massive 7.4 billion EUR restructuring program. The shares of the packaging manufacturer Gerresheimer jumped 7.1% after reporting a strong second quarter, with net income more than doubling.
French index CAC 40 is up by 0.32% to 5,585.68 points at mid0session trading. The stocks of Airbus inched higher by 0.24%, while financial stocks are down with BNP Paribas falling by 0.7% and Societe Generale dropped by 0.65%.
British blue-chip index FTSE 100 is trading with an increase of 11.54 points, or 0.15%, to 7,542.23 points. The Bank of England’s Financial Stability Report on Thursday suggested that British banks hold enough capital to cope with the simultaneous risks of a no-deal Brexit and a global trade war, but warned that a slide in overseas investment into some British assets due to Brexit does pose a risk to the wider economy. The stocks of Reckitt Benckiser gained 2.2% after it agreed to pay up to 1.4 billion USD to resolve all US federal investigations in connection with the sales and marketing of Suboxone Film by its former prescription pharmaceuticals business Indivior.
Wall Street pre-session recap
Wall Street stock index futures were higher on Thursday morning, on the back of fresh comments by Federal Reserve Chairman Jerome Powell.
Around 6 a.m. ET, Dow futures indicated a positive open of more than 70 points. Futures on the S&P and Nasdaq were both seen higher.
The markets will focus on the weekly jobless claims and inflation figures out at 8:30 a.m. ET and federal budget numbers are due at 2 p.m.