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Thursday, 12 December 2019

Global shares rally on earnings, data, bond prices slip

Solid U.S. and European corporate earnings and positive U.S. consumer confidence buoys global markets despite weak American housing and industrial data, easing bond prices

Reuters, Tuesday 28 Oct 2014
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Global equity markets rose and bond prices eased on Tuesday on solid corporate earnings on both sides of the Atlantic and an upbeat U.S. consumer confidence report that more than made up for weak American housing and industrial data.

Market moves were mostly muted ahead of a two-day Federal Reserve meeting that begins on Tuesday, when the U.S. central bank will likely reinforce its stated willingness to wait a long while before hiking interest rates.

The Fed is expected to announce the end of its massive bond-buying stimulus, known as quantitative easing.

The dollar index pared losses after the Conference Board reported U.S. consumer confidence hit its highest in seven years in October, reducing worries over disappointing data on domestic home prices and durable goods orders.

Major U.S. stock indexes hit session highs on the consumer sentiment report and corporate earnings that are beating expectations at a higher rate than recent quarters.

With 245 companies in the S&P 500 having reported earnings so far in the third quarter, 73.5 percent have beat analyst expectations, according to Thomson Reuters. Over the past four quarters, 67 percent of companies have beat estimates.

In Europe about a quarter of companies listed on the STOXX Europe 600 .STOXX benchmark have reported results so far, with 66 percent beating profit forecasts, Thomson Reuters data show.

"The strength of the current earnings season justifies owning equities, and we think there will be a recovery in the equity market," said James Butterfill, global equity strategist at Coutts in London.

MSCI's all-country world stock index .MIWD00000PUS rose 0.77 percent, while the pan-European FTSEurofirst 300 .FTEU3 index of leading companies rose 1 percent to 1,318.23.

On Wall Street, the Dow Jones industrial average .DJI rose 61.5 points, or 0.37 percent, to 16,879.44. The S&P 500 .SPX gained 12.09 points, or 0.62 percent, to 1,973.72 and the Nasdaq Composite .IXIC added 53.64 points, or 1.2 percent, to 4,539.57.

The dollar index .DXY, which measures the greenback against a basket of six currencies, was last down 0.18 percent at 85.341.

The dollar weakened against the euro EUR=, with the euro zone currency last at $1.2742, up 0.35 percent on the day.

The greenback briefly turned negative against the yen on the weaker U.S. data, but regained some of its earlier rise and was last up 0.15 percent at 107.97 yen JPY=.

U.S. Treasuries prices eased on the rally in global equity markets and as investors awaited the results of the Fed's meeting.

The 10-year Treasury notes US10YT=RR fell 4/32 in price to yield 2.2729 percent.

Brent crude oil steadied around $86 a barrel on Tuesday as a rally in European equities and a fall in the dollar offset weak U.S. data.

Brent for December LCOc1 was up 8 cents at $85.91 a barrel while U.S. December crude CLc1 was up 32 cents at $81.32.

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