Hopes of Bigger-Than-Expected ECB Stimulus Measures Lift Stocks

• Business & Financial News – Stock Market News Today • 

Stocks around the world staged a modest rebound Friday, lifted by hopes of a robust package of stimulus measures from the European Central Bank and strong retail sales data in the U.S.

The Stoxx Europe 600 rose 0.9%, led by gains in its technology and financial services sectors. In Asia, Hong Kong’s Hang Seng gained 0.9%, while stocks in Shanghai rose 0.3% and Japan’s Nikkei edged up 0.1%. In the U.S., S&P 500 futures climbed 1% and Dow Jones Industrial Average futures were up 0.9%. The contracts don’t necessarily predict moves after the opening bell.

U.S. stocks posted gains on Thursday after figures showed American consumer spending had remained strong in the face of global headwinds, countering manufacturing weakness.

The latest estimates on U.S. housing starts and the preliminary University of Michigan consumer sentiment survey are due later Friday. Investors will be watching for household inflation expectations, which has been a major concern for U.S. Federal Reserve policy makers in recent months.

Analysts at Rabobank expect that in July housing starts ticked up 0.2% and building permits up 3.1%. “Any further slowdown in the key residential construction sector will be as key a recession warning as the yield curve,” they wrote in a recent note to clients.

Among the biggest gainers in Europe on Friday was Sunrise Communications , a Swiss telecom group, which gained 3.3% following reports on complications in its bid for a cable operator.

IMCD, a Dutch chemicals and food-ingredient distributor, lost 13% after its chief executive said challenges to global growth were weighing on earnings.

The yield on 10-year Treasurys ticked up to 1.568% on Friday, from 1.534% on Thursday, marking a reversal from recent sessions. Bond yields and prices move in opposite directions.

Many seasoned bond investors, like David Lloyd, head of institutional portfolio management in the public debt team at M&G Investments, have been taken aback by the pace at which investors have piled into debt markets this year, sending yields to record lows.

“The level we have got to would have been utterly unimaginable, certainly before the global financial crisis completely unimaginable,” Mr. Lloyd said.

The Argentine peso was steady on the dollar on Friday after strengthening on Thursday. A left-wing candidate fared unexpectedly well in primary elections in the country, and there were suggestions some investors believed a government led by Alberto Fernandez won’t be too radical.

The price of Brent crude rallied 1.6%, continuing weeks of volatility in energy markets as tensions in the Strait of Hormuz ratcheted up. The conflict in the region could be set to cool after Gibraltar released an Iranian tanker impounded in July, opening the door for Tehran to free a British-flagged vessel it seized.



7 thoughts on “Hopes of Bigger-Than-Expected ECB Stimulus Measures Lift Stocks

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