Sunday 15 September 2019

Stocks advance as hints of trade war resolution give investors confidence

A trader works on the floor of the New York Stock Exchange
A trader works on the floor of the New York Stock Exchange

Vildana Hajric

US stocks edged higher, helped by fresh stimulus from Europe's central bank, amid mixed signals on whether the Trump administration and China are closer to a trade deal.

Equities clung to gains spurred by a report that American officials have discussed offering a limited trade agreement to China, though came off their highs when CNBC quoted a senior official saying there was no interim deal on the table.

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That came after the European Central Bank cut its main rate to -0.5pc and said it would buy €20bn of bonds a month. The euro gained on the news and bonds were mixed.

Any steps by China and the US to ease tensions ahead of face-to-face talks in Washington in the coming weeks would support sentiment as investors await monetary decisions from more of the world's major central banks.

The ECB stimulus will run until shortly before the next rate increase, and ECB president Mario Draghi painted a gloomy picture of the region's economy at a press conference.

"The fact that they're continuing to add stimulus is giving equity markets a little confidence here," said Tony Bedikian, head of global markets at Citizens Bank.

"I don't think we want to get our hopes up just yet."

The US Federal Reserve is due to meet next week as economic indicators give mixed signals about whether the record expansion will end soon. The dollar weakened.

Elsewhere, European equities edged higher. Turkey's lira rallied after its policy makers cut interest rates by more than forecast. Oil fluctuated before turning lower as the International Energy Agency warned OPEC it faces a "daunting" surplus of crude in 2020.

Hong Kong equities bucked the advance in Asia, dragged lower by shares of the city's exchange following a surprise takeover bid for its London counterpart.

Bloomberg

Irish Independent

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