Global shares higher as focus turns to US bank earnings
LONDON (AP) — Global shares rose Friday as investors focused on a run of earnings statements from U.S. banks. The British pound, however, was in retreat after President Donald Trump appeared to dash hopes of any imminent U.S.-U.K. trade deal.
KEEPING SCORE: In Europe, Britain’s FTSE 100 was up 0.4 percent at 7,683 while Germany’s DAX rose 0.3 percent to 12,537. France’s advanced 0.4 percent to 5,427. Wall Street was poised to flat with Dow futures and the broader S&P 500 futures down 0.1 percent.
US BANKS: The absence of any fresh trade war comments has allowed traders to focus on the start of the U.S. corporate results season. On Friday, JP Morgan Chase, Citigroup and Wells Fargo all report results. Already, JP Morgan said its second-quarter profits rose by 18 percent from a year ago, as it continued to benefit from higher interest rates and a lower tax bill following last year’s passage of President Donald Trump’s tax law.
ANALYST TAKE: “Investors will be paying close attention not just to the results but also references to trade tariffs and the impact they are expected to have on future results, particularly those that have already been targeted in counter-measures taken or proposed against the U.S.,” said Craig Erlam, senior market analyst at OANDA.
US-CHINA TRADE: China has yet to give details on what kind of “firm and forceful measures” it would use to respond to the fresh round of potential tariff hikes on $200 billion of goods announced by the U.S. on Tuesday. But Beijing stepped up pressure on Washington by suggesting that U.S. companies lobby American leaders. The U.S. and China are yet to resume negotiations over the dispute that led to tariff hikes on each other’s goods.
TRUMP’S UK VISIT: In an interview with The Sun newspaper, Trump slammed Prime Minister Theresa May’s plans for Britain’s departure from the European Union and praised her political rival Boris Johnson, who quit May’s Cabinet this week over Brexit differences. He also criticized immigration in Europe and declared that London Mayor Sadiq Khan, a Muslim, had failed to stop terrorism. The pound fell 0.6 percent to $1.31 after Trump’s comments, and May’s government struggled to put a brave face on a presidential visit that has veered wildly off course.
ASIA’S DAY: Asian markets finished mostly higher led by Japan, where the Nikkei 225 jumped 1.9 percent to 22,597.35, helped by a weakening in the yen against the U.S. dollar in a boon to blue chip manufacturers. South Korea’s Kospi advanced 1.1 percent to 2,310.90 and Hong Kong’s Hang Seng index added 0.2 percent to 28,525.44. But the Shanghai Composite Index fell 0.2 percent to 2,831.18.
OIL: Benchmark U.S. crude fell 7 cents to $70.26 a barrel on the New York Mercantile Exchange while Brent crude, used to price international oils, gave up 20 cents to $74.25 per barrel in London.
CURRENCIES: The euro was down 0.3 percent at $1.1635 while the dollar was steady at 112.55 yen.