Where did all the bulls go? Rallies stall as EU summit begins
By David Randall NEW YORK (Reuters) - Global equity benchmarks treaded water on Friday and government bond yields edged lower as investors waited on the European Union to iron out details of an expected 750 billion-euro recovery fund that could provide another round of stimulus as the world economy reels from the coronavirus pandemic. European, U.S. and other equity markets were heading for their third weekly gain in a row, though the pace of the rally has slowed.
By David Randall
NEW YORK (Reuters) - Global equity benchmarks treaded water on Friday and government bond yields edged lower as investors waited on the European Union to iron out details of an expected 750 billion-euro recovery fund that could provide another round of stimulus as the world economy reels from the coronavirus pandemic.
European, U.S. <.SPX> and other equity markets <.MIWD00000PUS> were heading for their third weekly gain in a row, though the pace of the rally has slowed. The U.S. Congress is set to begin debating a new aid package next week, as several states in the country's South and West implement fresh lockdown measures to curb the virus.
While retail sales for June released on Thursday beat market expectations, real-time measures of retail foot traffic and employee working hours and shifts have flatlined after steady growth since April.
"We now see higher risk of a market correction, considering the improvement in hard economic data we have seen over the past couple of months is likely to halt," said Tomo Kinoshita, global market strategist at Invesco in Tokyo.
MSCI's gauge of stocks across the globe <.MIWD00000PUS> rose 0.35% following modest gains in Europe and slight declines in Asia.
In afternoon trading on Wall Street, the Dow Jones Industrial Average <.DJI> fell 27.92 points, or 0.1%, to 26,706.79, the S&P 500 <.SPX> gained 9.35 points, or 0.29%, to 3,224.92 and the Nasdaq Composite <.IXIC> added 32.61 points, or 0.31%, to 10,506.44.
European leaders will continue to meet through Saturday, trying to overcome opposition from the Netherlands and Hungary to issue joint euro debt that could provide another boost of stimulus.
Dutch Prime Minister Mark Rutte, one of the main resisters to the recovery fund, which includes mass grants, said he was "not optimistic" an agreement would be reached on Friday.
The Netherlands wants countries receiving EU support from the fund to agree to reforms in their labor markets and pension systems, and is leading a group of several smaller EU nations calling for stricter conditions..
"Presumably, as is the way of Europe, they will agree to come back from more talks followed by a compromise and a watered-down deal," Societe Generale's Kit Juckes said of the EU discussions. "The positive, though, is that we are getting a recovery fund."
Perceived safe-haven assets were little changed. The dollar index <=USD> fell 0.36%, with the euro
The United States reported at least 75,000 new COVID-19 cases on Thursday, a daily record. Spain and Australia reported their steepest daily jumps in more than two months, while cases continued to soar in India and Brazil.
(Reporting by David Randall; Editing by Dan Grebler and Steve Orlofsky)
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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
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.