U.S. Stocks Open Mixed After Fed Outlook
2019年5月2日 - 11:08PM
Dow Jones News
By Paul J. Davies
U.S. stocks opened mixed Thursday as banks and other companies
that benefit from a better growth outlook reacted well to
Wednesday's Federal Reserve policy decision.
The Dow Jones Industrial Average fell 49 points, or 0.1%, to
26380 shortly after the opening bell. The S&P 500 declined less
than 0.1% and the Nasdaq Composite rose less than 0.1%.
Shares of banks like JPMorgan Chase, Wells Fargo and Bank of
America rose in morning trading.
U.S. stocks closed lower Wednesday after Federal Reserve
Chairman Jerome Powell used his press conference to play down the
weaker inflation data and emphasize a healthier global growth
picture, suggesting interest rate cuts weren't on the cards soon.
That should help banks whose profitability is hurt by lower
rates.
Asian and European stock indexes were mixed in response. The
Hang Seng in Hong Kong gained 0.8% and South Korea's Kospi Index
rose 0.4%, but the Stoxx Europe 600 was down 0.3% and the FTSE 100
in London was flat.
European banks saw gains, with France's BNP Paribas up 3.5%,
Deutsche Bank 2.7% higher and the U.K.'s Barclays up 1.5%.
Volkswagen leapt more than 4% after its earnings beat
expectations despite a EUR1 billion ($1.1 billion) charge to cover
ongoing legal risks from the 2015 emissions cheating scandal.
Strategists at Bank of America said European equities should
catch up more with the performance of U.S. ones, particularly those
more immediately exposed to fluctuations in economic growth, known
as cyclical stocks. These include banks and car makers and are
expected to benefit from improving economic data.
"Cyclicals have started to outperform defensives, but the
European cyclical recovery trade still lags far behind the U.S.,"
the strategists said Thursday.
Such stocks took a more positive message on the health of the
global economy from Mr. Powell's press conference than U.S. markets
had.
The Fed left rates unchanged and its initial policy statement
appeared to emphasize weaker-than-expected inflation, which
prompted U.S. stocks to rally and government bond yields to fall on
the idea that future rate cuts were more likely.
However, Mr. Powell's later press conference highlighted
short-term explanations for soft inflation and he stopped short of
endorsing a rate cut when pushed on how he would respond to further
weak data.
"He also spoke positively about the growth outlook in China and
Europe, and said that financial conditions are accommodative," said
Jim Reid, a macro strategist at Deutsche Bank. "All in all, he
sounded more optimistic about the economy than expected."
The S&P 500 ended Wednesday down 0.8% and the Dow Jones
Industrial Average was 0.6% lower.
The outlook for healthier economies, along with rate cuts
appearing less likely, presented a balanced outlook for markets.
Signs that better growth was winning out and encouraging risk
taking were evident in government bond yields Thursday morning
where yields were lifted as prices fell.
The 10-year U.S. Treasury yield was 2.519 Thursday morning, up
from 2.510% Wednesday.
The U.S. dollar, which marginally strengthened late Wednesday,
rose further Thursday morning, with the WSJ Dollar Index up
0.05%.
Write to Paul J. Davies at paul.davies@wsj.com
(END) Dow Jones Newswires
May 02, 2019 09:53 ET (13:53 GMT)
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