Stocks rise as U.S.-China phone calls boosts optimism, euro gains

By Herbert Lash NEW YORK (Reuters) - The euro rose on better-than-expected German business morale data on Tuesday while global equity markets gained, with the S&P 500 and Nasdaq poised to set new closing highs, as a phone call between U.S. and Chinese trade officials fueled optimism

Reuters August 26, 2020 02:05:52 IST
Stocks rise as U.S.-China phone calls boosts optimism, euro gains

Stocks rise as USChina phone calls boosts optimism euro gains

By Herbert Lash

NEW YORK (Reuters) - The euro rose on better-than-expected German business morale data on Tuesday while global equity markets gained, with the S&P 500 and Nasdaq poised to set new closing highs, as a phone call between U.S. and Chinese trade officials fueled optimism.

Gold prices fell as the positive signals on the U.S.-China trade front bolstered risk sentiment and offset support for the metal from a weaker dollar.

Top U.S. and Chinese trade officials reaffirmed their commitment to a trade deal that had appeared on shaky ground because of worsening bilateral ties.

Trading volume was low - typical for a late August session - but also as investors awaited a speech by Federal Reserve Chairman Jay Powell on Thursday, when he is expected to address the U.S. central bank's view on inflation and monetary policy.

A lack of news or single-stock catalyst to drive markets kept the session quiet, said Yousef Abbasi, global market strategist at StoneX Group Inc in New York.

"The market's on cruise control until Thursday morning when Fed Chairman Powell is expected to outline the new monetary policy and maybe forward guidance framework," he said.

A survey from the Conference Board showed U.S. consumer confidence unexpectedly fell in August to hit a six-year low.

Stocks in Europe retreated to close lower, while Wall Street meandered but was higher in afternoon trading. The S&P 500 set a new intra-day high early in the session, and after trading lower, was poised to close - along with the Nasdaq - at a new high.

Europe's broad FTSEurofirst 300 index <.FTEU3> dropped 0.32% to 1,434.94, while MSCI's benchmark for global equity markets <.MIWD00000PUS> rose 0.29% to 578.94.

Wall Street was mixed. The Dow Jones Industrial Average <.DJI> fell 0.31%, the S&P 500 <.SPX> gained 0.28% and the Nasdaq Composite <.IXIC> added 0.66%.

The S&P 500 and the Nasdaq logged closing highs on Monday, boosted by signs of progress in developing treatments and vaccines for COVID-19 .

A 1.63% slide in Apple Inc. , whose market capitalization of $2.15 trillion is greater than all the components in the benchmark FTSE 100 <.FTSE> index in London, initially kept stocks from rising.

German business morale improved more than expected in August as both manufacturing and services picked up steam, a survey by the Ifo institute showed. The survey raised hopes for a strong recovering from the coronavirus in Europe's largest economy.

The dollar index <=USD> fell 0.288%, with the euro up 0.39% to $1.1833.

Investors are waiting to hear Federal Reserve Chairman Jerome Powell's speech on Thursday about the U.S. central bank's policy framework review during the Jackson Hole symposium.

A major focus for investors will be whether Powell signals that the Fed will shift its inflation target to an average. This would allow inflation to rise more quickly than in the past.

Longer-term U.S. Treasury yields rose as traders moved into riskier asset classes on reassurance that a U.S.-China trade deal would continue. The yield on the benchmark 10-year Treasury note rose 6.4 basis points to 0.7096%.

Euro zone government bond yields rose on the Ifo survey. Germany's 10-year bond yields , a benchmark forthe region, rose 5 basis points to a one-week high of -0.445%.

Crude oil prices rose, supported by production cuts in the U.S. Gulf Coast as Tropical Storm Laura was forecast to become a major hurricane, while rising coronavirus cases in Asia and Europe capped gains.

Brent crude futures settled up 73 cents at $45.86 a barrel. U.S. crude futures rose 73 cents to settle at $43.35 a barrel.

U.S. gold futures settled down 0.8% at 1,923.10 an ounce.

(Reporting by Elizabeth Howcroft; editing by Giles Elgood, Larry King and Dan Grebler)

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

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.