Financial shares lead rebound in Europe
The dollar extended an advance on Thursday and Treasuries gave back gains from a day earlier as investors digested the first U.S. rate cut in a decade and the Federal Reserve’s message that it may not be the first of many. S&P 500 futures edged higher and European equities rose.
The Stoxx Europe 600 Index reversed a decline, with financial services shares leading the rebound and banks also rising after upbeat results from the likes of Societe Generale and Barclays. Most Asian equity gauges dropped, though Japan’s benchmark recouped early losses as the yen slid.
After the rate cut on Wednesday, Powell said in a press conference that the Fed’s quarter-point reduction amounted to a “mid-term policy adjustment.” Two Fed officials dissented to the decision, favoring no move. President Donald Trump said in a tweet “Powell let us down” with the size of the cut.
With the Fed out of the way, investors will continue to keep an eye on the ongoing earnings season as well as Friday’s U.S. jobs data and trade developments. American and Chinese negotiators plan to meet again in early September, after the latest round of talks ended with few signs of concrete progress.
Futures on the S&P 500 Index gained 0.1% as of 10:27 a.m. London time. The Stoxx Europe 600 Index jumped 0.3%, the biggest increase in more than a week. The U.K.’s FTSE 100 Index dipped less than 0.05%. The MSCI Emerging Market Index sank 0.9%, reaching the lowest in more than six weeks on its seventh consecutive decline. The MSCI Asia Pacific Index decreased 0.6% to the lowest in more than six weeks.
West Texas Intermediate crude declined 1.2% to $57.86 a barrel, the first retreat in more than a week. Gold dipped 0.5% to $1,406.61 an ounce, the weakest in more than two weeks.
This article was compiled by BOV Asset Management Limited, a member of the BOV Group. BOV Asset Management,TG Complex, Suite 2, Level 3, Brewery Str., Mriehel BKR 3000. Email: infoassetmanagement@bov.com Internet address: www.bovassetmanagement.com. BOV Asset Management is licensed by the MFSA.