US stocks attempted to push higher for a fourth day as investors mulled weak economic data and mixed corporate results, including an unexpected quarterly loss for Boeing. Treasuries advanced along with bonds in Europe.
The Nasdaq and S&P 500 veered into positive territory, bolstered by UPS exceeding its profit guidance. In addition to Boeing, Caterpillar weighed on the Dow Jones Industrial Average after the equipment maker projected earnings at the low end of forecasts. European bond yields dropped to unprecedented lows as disappointing manufacturing data added to concerns about the region’s growth and bolstered expectations for more central bank accommodation, including by the Federal Reserve.
“The Fed backdrop is providing some cushion so-to-speak,” Nancy Perez, senior portfolio manager at Boston Private Wealth, said by phone. “It would be very healthy to trade sideways here and digest the earnings, digest trade policy. The global PMIs are in contraction territory — they’re below 50. So the question is will they stabilize and start to rebound?”
According to Bloomberg, broadly positive earnings reports had buoyed stocks this so far week, though Deutsche Bank’s woes and flagging demand reported by carmakers and other manufacturers gave investors a reminder of the uncertain outlook for the global economy. To add to that, the U.S. Justice Department opened a broad probe into whether dominant technology firms are unlawfully stifling competition, hitting shares of Amazon, Facebook and Alphabet.
Central banks remain in focus after the IMF on Tuesday revised its forecasts for global growth lower and the Federal Reserve is seen trimming its policy rate by a quarter percentage point next week. The European Central Bank may hold fire tomorrow, though its message will be closely parsed for signs of a September move as the poor economic data ramp up pressure to deliver stimulus.
“This week is driven by earnings,” said Ryan Nauman, market strategist at Informa Financial Intelligence in New York. “If the ECB does cut rates, it will put more pressure on the Fed and obviously the Fed will hear it from the White House too. That will provide some optimism.”
On the trade front, chief U.S. negotiator Robert Lighthizer and Treasury Secretary Steven Mnuchin are set to travel to China next week for the first high-level, face-to-face meeting since talks broke down in May.
Elsewhere, Britain’s pound rebounded from a two-year low following Boris Johnson’s victory in the contest to succeed Theresa May as U.K. prime minister, though the nation’s equity benchmark underperformed. The dollar dropped for the first time in four days.
The S&P 500 Index rose 0.2 per cent New York time. The Nasdaq Composite Index rose 0.4 per cent and the Dow Jones Industrial Average eased 0.4 per cent. The Stoxx Europe 600 rose 0.1 per cent, the fourth straight increase. The MSCI Emerging Market Index was little changed. The MSCI Asia Pacific Index rose 0.2 per cent. The Bloomberg Dollar Spot Index dropped 0.2 per cent, the first drop in four days.
The euro was little changed at $1.1153, while the yen strengthened 0.2 per cent to 108 per dollar. The British pound rose 0.5 per cent to $1.2499, the first increase in four days. The MSCI Emerging Markets Currency Index rose 0.1 per cent.
