NEWS, QUOTES, CHARTS – DOW 30 – Dow Jones Industrial Average
U.S. futures put the S&P 500 and the Dow Jones Industrial Average on course to climb 0.3% at the open after both indexes eked out gains on Monday. The S&P remained 1.2% below its level a week earlier. Investors and strategists have recently signaled doubts over the prospects for global growth amid a raft of downbeat economic data.
Germany’s DAX index underperformed other European benchmarks, falling 0.1% after a German consumer confidence survey undershot forecasts. That chimed with similarly downbeat eurozone purchasing managers index figures at the end of last week. The yield on 10-year German government bonds slipped below its late Monday level, to minus 0.028%. Yields fall as prices rise.
Meanwhile, the yield on 10-year U.S. Treasurys was last 2.440%, up from 2.418% late Monday and on course to snap a four-day negative streak. A recent slip in 10-year U.S. Treasury yields below the level of three-month Treasury bills has been seen by some investors as foreshadowing a potential U.S. economic downturn.
With the first quarter ending later this week, investors are looking ahead to the next three months. “It’s been a good quarter for equities, fixed income and credit, which really raises the bar to repeat that kind of performance in the second quarter and brings us back to the point that equities and fixed income rallying does not, in principle, make sense if the global economy is slowing,” said Kenneth Broux, senior strategist at Société Générale.
French GDP figures on Tuesday matched market expectations. Growth figures from the U.S. are due Thursday, and from the U.K., Spain and Canada on Friday. U.K. assets remained little changed despite lawmakers’ decision late Monday to wrest control of the Brexit process away from Prime Minister Theresa May, in a move that will prompt a series of indicative votes this week aimed at easing legislative gridlock. The FTSE 100 was up 0.3% and the pound was nearly flat against the dollar at $1.3212.
The gains in Europe followed more mixed trading in Asia. Japan’s Nikkei 225 climbed 2.2% thanks to buoyant pharmaceuticals and transportation stocks, while shares in Nintendo jumped 4.8% after the company announced plans to launch two new versions of its Switch console.
South Korea’s Kospi benchmark rose 0.2%, with index heavyweight Samsung Electronics down 0.6% after warning of a hit to earnings from weak chip prices. Mainland China stocks fell ahead of the resumption of cabinet-level trade negotiations between the U.S. and China. The Shanghai Composite Index fell 1.5% and the Shenzhen A-Share dropped 2.2%, though those benchmarks tend to be more volatile than many of their Asian counterparts. Hong Kong’s Hang Seng gained 0.2%.