Equities edge higher as political concerns weigh on sentiment

By David Randall NEW YORK (Reuters) - Global equities treaded water and U.S. government bonds edged higher on Friday as investors weighed better-than-expected corporate earnings and increased M&A activity in Europe against political concerns ranging from the U.S. elections to Brexit.

Reuters September 12, 2020 03:05:19 IST
Equities edge higher as political concerns weigh on sentiment

Equities edge higher as political concerns weigh on sentiment

By David Randall

NEW YORK (Reuters) - Global equities treaded water and U.S. government bonds edged higher on Friday as investors weighed better-than-expected corporate earnings and increased M&A activity in Europe against political concerns ranging from the U.S. elections to Brexit.

Growing fears over a messy no-deal Brexit dragged sterling to 5-1/2-month lows after the European Union told Britain it should urgently scrap a plan to break their divorce pact.

"Most of the risks faced by markets for the rest of the year are political, so around the U.S. election, the UK government's exit from the EU and U.S.-China tensions," said Francois Savary, chief investment officer at Swiss wealth manager Prime Partners.

"As people take a step back to assess these risks, we're in this consolidation, holding pattern, which was needed as markets aren't cheap at the moment."

MSCI's gauge of stocks across the globe <.MIWD00000PUS> gained 0.10% following modest gains in Europe and Asia. Japan's Nikkei <.N225> rose after Tokyo dropped its coronavirus alert by one notch from the highest level as COVID-19 cases trend down.

European indexes were bolstered after telecoms and cable group Altice Europe said its founder had offered to take the company private, sending its shares up more than 24%.

On Wall Street, the Dow Jones Industrial Average <.DJI> rose 131.06 points, or 0.48%, to 27,665.64, the S&P 500 <.SPX> gained 1.78 points, or 0.05%, to 3,340.97 and the Nasdaq Composite <.IXIC> dropped 66.05 points, or 0.6%, to 10,853.55.

Shares of cloud services company Oracle Corp and exercise bike maker Peloton Interactive Co both jumped after better-than-expected earnings but later pared their gains.

The NYSE Fang+ index of big 10 tech companies <.NYFANG> lost 5.6% for the week in its biggest weekly decline since March.

Still, the index has more than doubled from its March trough, and investors have gathered that high valuations are justifiable in light of near-zero interest rates in much of the developed world and the massive liquidity the world's central banks have created.

Many investors have said the sell-off was a healthy correction.

Yet, with the world's stocks still trading near the most expensive levels relative to the profit outlook since the 2000 tech bubble, some analysts called for caution.

"Global shares had rallied on expectations of economic recovery from lockdowns. But as the autumn begins (in the northern hemisphere), people wonder if coronavirus infections could worsen," said Kozo Koide, chief economist at Asset Management One.

The European Union is ramping up preparations for a tumultuous end to the four-year Brexit saga after Britain explicitly said this week it plans to break international law by breaching parts of the Withdrawal Agreement treaty signed in January.

The dollar index <=USD> fell 0.104%, with the euro up 0.26% at $1.1844.

Benchmark 10-year U.S. Treasury notes last rose 5/32 in price to yield 0.6674%, from 0.684% late on Thursday.

U.S. crude recently rose 0.56% to $37.51 per barrel and Brent was at $39.96, down 0.25% on the day.

(Reporting by David Randall; Editing by Nick Zieminski, Tom Brown and Dan Grebler)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

Apple will enable storage of IDs like drivers licenses on iPhones
Business

Apple will enable storage of IDs like drivers licenses on iPhones

By Stephen Nellis (Reuters) -Apple Inc on Monday said it will offer the ability to store state-issued identification cards digitally on iPhones and that it is working with the U.S. Transportation Security Administration to accept the digital IDs at airports, one of several updates to the software that runs on its devices. It also showed updates to its FaceTime video chat app, adding the ability to schedule calls with multiple attendees and making the software compatible with Android and Windows devices.

Airline bosses call on UK and U.S. to lift trans-Atlantic travel restrictions
Business

Airline bosses call on UK and U.S. to lift trans-Atlantic travel restrictions

LONDON (Reuters) - The bosses of all airlines flying passenger services between Britain and the United States called on Monday for the countries' governments to relax COVID-19 restrictions to reopen travel routes between the two countries. After more than a year of restrictions, the CEOs of American Airlines, IAG unit British Airways, Delta Air Lines, United Airlines and JetBlue Airways Corp said high vaccination rates in both countries meant travel could restart safely. The push for reopening trans-Atlantic routes on Monday comes ahead of meetings between U.S.

EU patience wearing thin with UK on N.Ireland, weighing options
Business

EU patience wearing thin with UK on N.Ireland, weighing options

BRUSSELS (Reuters) - The European Union's patience towards Britain over Brexit arrangements in Northern Ireland is wearing thin and the bloc will consider its options should Britain continue its "confrontational path", an EU official said on Monday.