Global Shares Up on Wednesday 08/05 05:57
Global markets and U.S. stock futures rose Wednesday amid investor concern
about U.S. stimulus spending and a trade agreement with Beijing.
BEIJING (AP) -- Global markets and U.S. stock futures rose Wednesday amid
investor concern about U.S. stimulus spending and a trade agreement with
London and Frankfurt opened higher, while Shanghai, Hong Kong and Seoul
rose. Tokyo declined.
Gold rose to a new record after a deadly explosion in Beirut.
Investors are watching the stalemate among U.S. legislators over employment
benefits for millions of Americans thrown out of work by the coronavirus
pandemic and spending to shore up anemic economic growth.
At the same time, news reports from Washington said Chinese and American
trade envoys will meet this month to review their "Phase 1" agreement aimed at
ending a tariff war. That follows President Donald Trump's threat to discard
the agreement over Beijing's handling of the coronavirus pandemic.
Traders see that as a sign of "commitment to ensuring the agreement holds"
despite escalating U.S.-Chinese tension, Stephen Innes of AxiTrader said in a
In early trading, the FTSE 100 in London gained 1% to 6,093.20 and
Frankfurt's DAX advanced 0.8% to 12,708.61. The CAC 40 in France added 0.8% to
On Wall Street, the future for the benchmark S&P 500 index was up 0.6% and
that for the Dow Jones Industrial Average was 0.5% higher.
On Tuesday, S&P 500 index gained 0.4% as a rally eased. The index is within
2.4% of its February record high. The Dow climbed 0.6% and the Nasdaq composite
added 0.4% to a record.
In Asia, the Shanghai Composite Index gained 0.2% to 3,377.56 while the
Nikkei 225 in Tokyo lost 0.3% to 22,514.85. The Hang Seng in Hong Kong rose
0.6% to 25,102.54.
The S&P-ASX 200 in Sydney fell 0.6% to 6,001.30 while Seoul's Kospi gained
1.4% to 2,311.86.
India's Sensex was little-changed at 37,691.69. New Zealand retreated while
Singapore, Bangkok and Jakarta gained.
Also Wednesday, gold rose $29.20 to $2,050.90.
Investors have been buying gold and silver, usually seen as a store of value
if stock prices decline. Forecasters see that as an indicator of rising unease
about the global economic outlook.
The explosion in Beirut killed at least 70 people, injured more than 3,000
and flattened much of the Lebanese capital's port. The cause of the most
destructive blast in the country's history was unclear.
Global markets have recovered most of this year's losses as investors look
ahead to the possible development of a coronavirus vaccine. Forecasters warn
the rebound might be too big and fast to be sustained by uncertain economic
activity as infections rise in the United States and some other countries.
Legislators in Washington are at odds over a relief package including a
replacement for $600 weekly unemployment benefits that expired last week.
The number of people filing for unemployment is rising after a resurgence of
infections pushed some states to reimpose controls on business.
Economists expect a report Friday to show U.S. employers added 1.8 million
jobs last month, which would be welcome growth but also a slowdown from June.
For now, investors are relying on the Federal Reserve, which said last week
it would keep interest rates near zero. At the same time, Fed Chairman Jerome
Powell said Congress needs to take action.
"Markets are betting on the Fed picking up the slack more permanently even
from temporary fiscal stimulus lapses and convulsions," Hayaki Narita of Mizuho
Bank said in a report.
In energy markets, benchmark U.S. crude rose 71 cents to $42.41 per barrel
in electronic trading on the New York Mercantile Exchange. The contract rose 69
cents on Tuesday to settle at $41.70 per barrel. Brent crude, the basis for
pricing international oils, gained 73 cents to $45.16 per barrel in London. It
gained 28 cents the previous session to $44.43.
The dollar declined to 105.70 yen from Tuesday's 105.72 yen. The euro gained
to $1.1841 from $1.1805.