World shares mixed as US says trade accord with China ready
Dollar rising, crude oil prices falling
TOKYO,Dec 21 (AP): Global shares meandered in a narrow range on Friday despite another session of record highs on Wall Street.
Britain’s FTSE 100 edged 0.1% lower to 7,565.53 while the CAC 40 in Paris added 0.2% to 5,981.93. Germany’s DAX was little changed at 13,216.25. US shares were set for a tepid start, with the future contract for the S&P 500 down less than 0.1% and the contract for the Dow Jones 0.03% lower.
There was little apparent reaction after US Treasury Secretary Steven Mnuchin said Thursday that a preliminary trade deal with China would be ready for signing in early January. Mnuchin told CNBC that he was “very confident” the deal would help rebalance trade and open Chinese markets to more American products and services.
The deal with Beijing is “just going through what I would consider to be a technical, legal scrub,” Mnuchin said. He said he expected the agreement to result in a doubling of US farm exports to China and that American farmers would be up to the task. China, however, has not confirmed any details of its plans for purchases of US farm products. A Commerce Ministry spokesman in Beijing on Thursday said only that the two sides were in “close communication.”
The major US stock indexes have climbed to record highs as investors welcomed the news that Washington and Beijing had taken steps to cool their trade conflict.
In Asia on Friday, Japan’s Nikkei 225 index edged 0.2% lower to 23,816.63 and the S&P ASX 200 in Australia lost 0.3% to 6,816.30. The Shanghai Composite index shed 0.4% to 3,004.94. Hong Kong’s Hang Seng index climbed 0.3% to 27,871.35, while the Sensex in Mumbai advanced 0.1% to 41,727.67. South Korea’s Kospi picked up 0.4% to 2,204.18. Shares fell in Taiwan and most of Southeast Asia.
Trump became just the third US president to be impeached after the House voted Wednesday on charges of abuse of power and obstructing Congress in an investigation.
The President had warned months ago that his impeachment would roil markets, but traders say it has virtually no impact. That’s mostly because they see it as extremely unlikely that he or his market-friendly policies will leave office before the end of his term.
Overnight, US markets shrugged off the impeachment of President Donald Trump by the House of Representatives, chosing to focus instead on encouraging earnings reports from several big companies.
US
Wall Street capped a mostly quiet week of trading Friday with broad gains for stocks and more record highs for the major indexes.
Technology and health care stocks powered much of the rally. The S&P 500 notched its 10th winning week in the last 11. The benchmark index also finished with a record high for the fourth time this week. The Dow Jones Industrial Average and Nasdaq composite also ended the week at new highs.
Momentum for stocks has been clearly upward for months, and the market is heading into what’s historically been a seasonally good period.
Rising optimism around a “Phase 1” trade deal announced a week ago between the United States and China has helped push stock indexes to records. Fears about a possible recession have also faded since the summer after the Federal Reserve cut interest rates three times, and the central bank appears set to keep them low for a long time.
The S&P 500 rose 15.85 points, or 0.5%, to 3,221.22. With less than two weeks left in 2019, the S&P 500 is up 28.5% for the year.
The Dow Jones Industrial Average climbed 78.13 points, or 0.3%, to 28,455.09. The Nasdaq composite added 37.74 points, or 0.4%, to 8,924.96. The Russell 2000 index of smaller company stocks picked up 4.81 points, or 0.3%, to 1,671.90.
Roughly two stocks rose for every one that fell on the New York Stock Exchange.
The 10-year Treasury yield edged to 1.92% from 1.91% late Thursday. The two-year yield climbed to 1.62% from 1.60%. The 30-year yield held steady at 2.34%.
The US and China agreed last week to cut tariffs on some of each others’ goods and postpone other tariff threats. The interim trade deal has helped ease a key source of uncertainty for investors heading into next year.
Encouraging reports on home construction, industrial production and other economic data earlier this week helped keep the rally going.
More good news arrived Friday with a report showing US households continue to spend amid a healthy job market. That is making up for hesitance by businesses to spend, and it’s helping to keep the economy growing at a moderate pace.
Spending by US households has been the main pillar for the economy recently, even as CEOs turned cautious amid all the uncertainty created by President Donald Trump’s trade wars.
A separate report confirmed the economy grew at a moderate annual rate of 2.1% in the third quarter. Much of the growth from that July-throughSeptember quarter came from stronger consumer spending.
Technology stocks accounted for a big slice of the market’s gains. Intel rose 1.7%. Health care and industrial stocks also notched solid gains. Cigna climbed 3% and Union Pacific added 1.7%.
Carnival jumped 7.6% for the biggest gain in the S&P 500 after it reported stronger earnings for the latest quarter than analysts expected. The cruise ship operator also gave a profit forecast for the upcoming quarter that topped analysts’ forecasts.
CarMax dropped 6.2%, the largest loss in the S&P 500, after it reported weaker earnings for the latest quarter than analysts expected.
Stocks have traditionally climbed in the last five days of each calendar year, plus the first two of the new year. It’s happened often enough that traders call it the “Santa rally,” and it’s brought an average gain of 1.3% for the S&P 500 since 1969, according to the Stock Trader’s Almanac.
Over the last 50 years, stocks have climbed in the seven-day stretch roughly three-quarters of the time.
Benchmark crude oil fell 74 cents to settle at $60.44 a barrel. Brent crude oil, the international standard, slid 40 cents to close at $66.14 a barrel.
Wholesale gasoline was unchanged at $1.71 per gallon. Heating oil declined 1 cent to $2.02 per gallon. Natural gas rose 6 cents to $2.33 per 1,000 cubic feet.
Gold fell $3.50 to $1,474.70 per ounce, silver rose 7 cents to $17.13 per ounce and copper fell 2 cents to $2.81 per pound.
The dollar rose to 109.47 Japanese yen from 109.28 yen on Thursday. The euro weakened to $1.1075 from $1.1123. European stock markets closed broadly higher.
Asia
Asian shares meandered in a narrow range on Friday despite another session of record highs on Wall Street.
There was little apparent reaction Friday after US Treasury Secretary Steven Mnuchin said that a preliminary trade deal with China was ready for signing in early January. Mnuchin told CNBC that he was “very confident” the deal would help rebalance trade and open Chinese markets to more American products and services.
Japan’s Nikkei 225 index edged 0.1% lower to 23,840.41 and the S&P ASX 200 in Australia lost 0.3% to 6,816.30. The Shanghai Composite index shed 0.2% to 3,012.02.