Global Stocks Pause on Mixed Economic Data
15 Maggio 2019 - 01:55PM
Dow Jones News
By Paul J. Davies
U.S. stocks were priced to open lower in futures markets on
Wednesday following European indexes down despite the strong close
Tuesday when President Trump suggested a U.S.-China trade deal
could still be in the cards.
The S&P 500 and the Dow Jones Industrial Average were both
set to open about 0.3% lower, after the Stoxx Europe 600 slipped
0.4% in morning trade and the FTSE 100 slid 0.1%.
Germany's DAX was also down 0.1%, despite data showing the
country's economy rebounded in the first quarter, when it expanded
0.4%.
The European stumble followed a much stronger performance in
Asian stocks despite even Chinese economic data that showed
industrial production, retail sales and fixed-asset investment all
slowed in April.
Shares in Shanghai were nearly 2% higher, Hong Kong's Hang Seng
Index was up 1% and Japan's Nikkei gained 0.6%.
In the U.S. futures pointed to a fractionally lower open on Wall
Street, with the S&P 500 and the Dow Jones Industrial Average
both down less than 0.1%.
Sebastien Galy, senior macro strategist at Nordea Investment,
said investors in China seemed to react to the weak economic data
by assuming that the government would bring more economic stimulus
measures, sending stocks higher. The buying, he thought, was driven
mainly by those who had been underinvested in the early part of the
year.
"What seems to be happening is that many had missed the rally
since December and were waiting to buy on a dip," he said. "With
such a psychology, a shock that should be sizable seems to fade
faster."
In Germany, the first-quarter growth was mainly domestically
driven, with stronger private consumption and construction at home.
Carsten Brzeski, ING's chief economist in Germany, said the data
confirmed his view that not all is bad in the economy there,
although investors shouldn't get overexcited as industry was still
struggling and the country would face more headwinds this year.
"Today's German GDP data are in our view not necessarily the
'return of the living dead' as we still see the growth potential of
the German economy, particularly if investments finally pick up,"
Mr. Bzreski said. "Instead, strong German data are rather another
illustration that the condemned (often) live longer."
The WSJ Dollar Index, which measures the dollar against a basket
of currencies, was flat.
The yield on 10-year U.S. Treasurys dipped to 2.381%, from
2.421% on Tuesday. German 10-year bund yields dropped to their
lowest level since the end of September 2016, hitting -0.110%, from
-0.074% on Tuesday.
In commodities, oil was unruffled by apparent security fears in
the Middle East that led the U.S. State Department to tell all
nonemergency staff to leave Iraq. Brent crude oil, the global
benchmark, was down 0.4% at $70.93 a barrel.
The WSJ Dollar Index, which measures the dollar against a basket
of currencies, was up 0.04%. Gold was up 0.2% at $1,298.90 an
ounce.
Write to Paul J. Davies at paul.davies@wsj.com
(END) Dow Jones Newswires
May 15, 2019 07:40 ET (11:40 GMT)
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