Global Stocks Rally as China's Economy Stabilizes
18 January 2020 - 1:20AM
Dow Jones News
By Will Horner
Global stocks advanced Friday as signs of the Chinese economy
stabilizing and robust earnings from some of the biggest U.S. banks
fueled investors' optimism.
Futures tied to the Dow Jones Industrial Average gained 0.3%, a
day after notching yet another all-time high. The pan-continental
Stoxx Europe 600 gauge rose 1%, putting it on course to close at a
fresh record.
Fresh data showed that China's industrial production rebounded
last year, with the 6.9% growth in output in December beating
forecasts and marking the fastest pace of expansion in nine months.
Meanwhile, economic growth slowed to 6.1% last year, largely in
line with market expectations. The Chinese yuan strengthened 0.3%
against the dollar after the data, hitting its highest levels since
July.
While it is too early to tell if the Chinese economic slowdown
has bottomed out, the data added to investors' recent optimism
about the prospects for the global economy following the partial
resolution to the U.S.-China trade dispute, said Geoffrey Yu, head
of the U.K. office for UBS Group's wealth management arm.
"It's a case of looking at it as a glass-half-full, rather than
a glass-half-empty," Mr. Yu said. "There is a general sense that it
could have been a lot worse."
Ahead of the New York open, shares in Gap jumped nearly 4% after
the retailer said it no longer plans to separate Old Navy into a
stand-alone public company. Gap also said it expects to report
fiscal 2019 earnings moderately above prior guidance.
Schlumberger rallied 2.7% in premarket trading after the oil
services company reported fourth-quarter profit and revenue that
exceeded expectations. State Street gained 3.3% as the trust bank's
profit also beat Wall Street's expectations.
In Asia, the Shanghai Composite Index ended the day largely
flat. The fresh economic data has prompted speculation that China's
central bank may hold off on additional stimulus measures, said
Ipek Ozkardeskaya, a senior analyst at Swissquote Bank.
Among European equities, Cie. Financière Richemont rose 5% after
the Swiss luxury-goods maker's fiscal third-quarter sales beat
analysts' expectations.
The British pound slipped 0.2% against the dollar after U.K.
retail sales unexpectedly fell in December, further raising
expectations that the Bank of England will cut interest rates when
policy makers meet at the end of the month, said Peter Dixon, an
economist at Commerzbank.
"It's another piece of the jigsaw," Mr. Dixon said of the retail
sales data. "We already had a big miss on November GDP figures and
it now looks like a stretch to assume the U.K. will register
positive growth in the fourth quarter."
Later in the day, a number of Federal Reserve policy makers are
also scheduled to give speeches.
Write to Will Horner at William.Horner@wsj.com
(END) Dow Jones Newswires
January 17, 2020 09:05 ET (14:05 GMT)
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