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GLOBAL MARKETS-Stocks rise as U.S.-China phone calls boosts optimism, euro gains

Published 2020-08-25, 03:39 p/m
© Reuters.
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(Adds oil, gold settlement prices)

* Apple shares, poor consumer confidence weigh on Wall Street

* Oil prices rise on storm-driven output cuts

* German consumer confidence data boosts euro

By Herbert Lash

NEW YORK, Aug 25 (Reuters) - The euro rose on better-than-expected German business morale data on Tuesday while global equity markets gained, with the S&P 500 and Nasdaq poised to set new closing highs, as a phone call between U.S. and Chinese trade officials fueled optimism.

Gold prices fell as the positive signals on the U.S.-China trade front bolstered risk sentiment and offset support for the metal from a weaker dollar.

Top U.S. and Chinese trade officials reaffirmed their commitment to a trade deal that had appeared on shaky ground because of worsening bilateral ties. volume was low - typical for a late August session - but also as investors awaited a speech by Federal Reserve Chairman Jay Powell on Thursday, when he is expected to address the U.S. central bank's view on inflation and monetary policy.

A lack of news or single-stock catalyst to drive markets kept the session quiet, said Yousef Abbasi, global market strategist at StoneX Group Inc in New York.

"The market's on cruise control until Thursday morning when Fed Chairman Powell is expected to outline the new monetary policy and maybe forward guidance framework," he said.

A survey from the Conference Board showed U.S. consumer confidence unexpectedly fell in August to hit a six-year low. in Europe retreated to close lower, while Wall Street meandered but was higher in afternoon trading. The S&P 500 set a new intra-day high early in the session, and after trading lower, was poised to close - along with the Nasdaq - at a new high.

Europe's broad FTSEurofirst 300 index .FTEU3 dropped 0.32% to 1,434.94, while MSCI's benchmark for global equity markets .MIWD00000PUS rose 0.29% to 578.94.

Wall Street was mixed. The Dow Jones Industrial Average .DJI fell 0.31%, the S&P 500 .SPX gained 0.28% and the Nasdaq Composite .IXIC added 0.66%.

The S&P 500 and the Nasdaq logged closing highs on Monday, boosted by signs of progress in developing treatments and vaccines for COVID-19.

A 1.63% slide in Apple Inc. AAPL.O , whose market capitalization of $2.15 trillion is greater than all the components in the benchmark FTSE 100 .FTSE index in London, initially kept stocks from rising.

German business morale improved more than expected in August as both manufacturing and services picked up steam, a survey by the Ifo institute showed. The survey raised hopes for a strong recovering from the coronavirus in Europe's largest economy.

The dollar index =USD fell 0.288%, with the euro EUR= up 0.39% to $1.1833.

Investors are waiting to hear Federal Reserve Chairman Jerome Powell's speech on Thursday about the U.S. central bank's policy framework review during the Jackson Hole symposium.

A major focus for investors will be whether Powell signals that the Fed will shift its inflation target to an average. This would allow inflation to rise more quickly than in the past.

Longer-term U.S. Treasury yields rose as traders moved into riskier asset classes on reassurance that a U.S.-China trade deal would continue. The yield on the benchmark 10-year Treasury note US10YT=RR rose 6.4 basis points to 0.7096%.

Euro zone government bond yields rose on the Ifo survey. Germany's 10-year bond yields DE10YT=RR , a benchmark for the region, rose 5 basis points to a one-week high of -0.445%.

Crude oil prices rose, supported by production cuts in the U.S. Gulf Coast as Tropical Storm Laura was forecast to become a major hurricane, while rising coronavirus cases in Asia and Europe capped gains.

Brent crude futures LCOc1 settled up 73 cents at $45.86 a barrel. U.S. crude futures CLc1 rose 73 cents to settle at $43.35 a barrel.

U.S. gold futures GCv1 settled down 0.8% at 1,923.10 an ounce.

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http://tmsnrt.rs/2ihRugV Asset performance in dollar terms

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