Sunday 22 July 2018

Stocks down on central banker wariness

Traders work on the floor of the New York Stock Exchange (NYSE)
Traders work on the floor of the New York Stock Exchange (NYSE)

Global stocks fell on Thursday as investors trimmed their exposure to riskier assets after European Central Bank minutes revealed a wary take on the economic outlook from ratesetters on both sides of the Atlantic.

The ECB expressed caution about removing monetary stimulus too soon following a recent bounce in the euro, the record of its last meeting showed - hitting the single currency along with the region's equity markets. US shares were set to follow suit, extending losses a day after a similarly downbeat message in minutes from the Federal Reserve, where some policymakers cautioned against rate rises while US inflation remained weak.

As money market futures cut their expectations of a US rate hike by December to 40pc from just under 50pc before the Fed's minutes, futures for the blue-chip S&P 500 shed 0.2pc in pre-market trade. In Europe, the broad Stoxx 600 index was down 0.1pc, snapping a three-day winning streak. The UK's FTSE 100 fell 0.4pc, Germany's DAX 0.1pc and France's CAC 40 0.2pc. In Dublin, the Iseq was almost 1pc lower at 6,785.91.

US President Donald Trump's decision on Wednesday to disband two business councils after a number of its members quit in protest over his comments about white nationalists also continued to weigh on stock valuations. "Trump dissolving his major business groups makes the investment community even more pessimistic because this sets the stage for even more failure for him," said Naeem Aslam, chief market analyst at Think Markets in London.

The dollar erased much of its overnight losses, however. Oil prices were steady after US data showed a fall in crude stockpiles but also an increase in production.

Irish Independent

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