Connect with us

Stocks rose on Friday as investors looked to end a record-setting week on a high note after testimony from the top Federal Reserve official signaled that a rate cut was coming. 

The Dow Jones Industrial Average climbed 150 points and hit an all-time high. The S&P 500 traded 0.2% higher and also reached a record. The Nasdaq Composite advanced 0.4%.

Shares of Dow, Inc. led the Dow Industrials higher, rising 3.2%. Intel and Caterpillar, meanwhile, climbed 2% and 1.7%, respectively. J.B. Hunt Transport Services was the best-performing stock in the S&P 500, jumping 5.1%, and leading a 1% gain in the industrials sector.

The Dow closed above 27,000 for the first time ever on Thursday while the S&P 500 also notched a record close. Investors have been piling into stocks in recent weeks amid expectations that the Fed will cut interest rates later this month.

The major indexes were headed for solid weekly gains. The Dow and S&P 500 are up 1.1% and 0.5%, respectively. The Nasdaq, meanwhile, is up 0.8% this week.

Fed Chair Jerome Powell testified in front of congressional leaders this week that “crosscurrents” from weaker overseas economic activity and rising trade tensions are dampening the outlook on the U.S. economy.

Traders work on the floor of the New York Stock Exchange.

Brendan McDermid | Reuters

“This market remains all about Fed expectations,” said Tom Essaye, founder of The Sevens Report. “The risks are clear: If the Fed, ECB or anyone else disappoints on the enormous dovish expectations they have made for themselves, this market will drop.”

Market expectations for lower rates currently sit at 100%, according to the CME Group’s FedWatch tool. Traders are also pricing in a 20% chance of the Fed cutting by 50 basis points.

Expectations for lower rates persist despite the release of stronger-than-expected economic data. The producer and consumer price indexes — two widely followed measures of inflation — rose more than expected last month, the Labor Department said this week. Last week, the U.S. government reported stronger-than-expected jobs growth for June.

“The Fed is on a one-way street headed to a cut,” said Art Hogan, chief market strategist at chief market strategist at National Securities. “The market is clearly in ‘don’t-fight-the-Fed’ mode.”

“Over the next few weeks, we’ll shift our focus to something more fundamental: earnings,” he said. “It’s never too comfortable to come into earnings season trading at all-time highs.”

The corporate earnings season kicks off next week as major banks like J.P. Morgan Chase, Citigroup, Goldman Sachs and Bank of America scheduled to report. Estimates for the season are downbeat, however.

According to FactSet, analysts expect S&P 500 earnings to have fallen by more than 2% in the second quarter.

—CNBC’s Sam Meredith contributed to this report.

Source link

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

World

Europe is at odds over who will replace Christine Lagarde at the IMF

Published

on

International Monetary Fund (IMF) managing director Christine Lagarde speaks during a press conference in Tokyo on October 4, 2018.

Kazuhiro Nogi | AFP | Getty Images

European officials are still scratching their heads over Christine Lagarde’s successor at the International Monetary Fund (IMF), according to several people with knowledge of the discussions, with no standout candidate for the role.

Lagarde is due to start her new job as president of the European Central Bank (ECB) in November, leaving the IMF’s chair empty. In Europe, EU member states agree that the next IMF managing director needs to be from the continent — but they’re struggling to rally behind one particular name.

“The truth is that there is no readily available tried and tested European all-rounder,” a European minister, who did not want to be named due to the sensitive nature of the talks, told CNBC.

There is no official shortlist of candidates, but many governments of EU nations have put forward a name to take the top job. Some of the non-official candidates are:

  • Jeroen Dijsselbloem, former Dutch finance minister and president of the Eurogroup (which brings together the 19-euro zone finance ministers).
  • Mario Centeno, the Portuguese finance minister and currently Eurogroup chief.
  • Nadia Calvino, the Spanish finance minister.
  • Olli Rehn, central bank governor of Finland and former European commissioner for the euro.
  • Mark Carney, the current governor of the Bank of England — a Canadian citizen who also has Irish and English passports.
  • Kristalina Georgieva, from Bulgaria, who is currently serving as chief executive of the World Bank.
  • Mario Draghi, the outgoing ECB president.

According to two other European officials, who also preferred to remain anonymous, none of the candidates have the right profile at this stage. Some names also don’t have enough experience or they are not liked by certain governments due to their political affiliation, their past comments or their background, the officials told CNBC. Since the IMF’s formation back in 1945, the managing director has always been from Europe.

There is also an age restriction to deal with. The IMF’s rules state that managing directors must be under 65 years of age when appointed and cannot serve beyond their 70th birthday. As such, the chances of certain candidates, such as Kristalina Georgieva, become much smaller.

“If (the) age limit is adapted to today’s realities, there is Georgieva and Draghi,” the European minister told CNBC.

France, who’s chairing the discussions across the different EU capitals, is reportedly looking at ways to change the laws. However, it is unclear whether that idea would be approved inside the IMF.

A source within the French government told CNBC that Paris “does not have a preferred candidate and will play its coordination role impartially.” Meanwhile, a separate EU official confirmed to CNBC that the aim is to have an agreement by the end of the month.

Source link

Continue Reading

World

EU has 35 billion euro list ready if US hits EU cars: EU trade chief

Published

on

European Commissioner Cecilia Malmstrom holds a news conference in Brussels, Belgium March 7, 2018.

Eric Vidal | Reuters

The European Union would retaliate with extra duties on 35 billion euros ($39.1 billion) worth of U.S. goods if Washington went ahead with tariffs on EU cars, the bloc’s trade chief said on Tuesday.

“We will not accept any managed trade, quotas or voluntary export restraints and, if there were to be tariffs, we would have a rebalancing list,” European Trade Commissioner Cecilia Malmstrom told a committee of the European Parliament.

“It is already basically prepared, worth 35 billion euros. I do hope we do not have to use that one,” she continued.

Source link

Continue Reading

World

GE reveals new parts for the ‘world’s largest offshore wind turbine’

Published

on

GE Renewable Energy, a subsidiary of General Electric based in Paris, revealed “the first manufactured components” for its gigantic Haliade-X 12 megawatt (MW) offshore wind turbine.

On Monday, the firm displayed the first nacelle for the turbine, which will now be shipped from Saint-Nazaire in France to Rotterdam-Maasvlakte in the Netherlands. A nacelle sits directly behind a turbine’s blades and is a shell-like structure that contains crucial pieces of kit. These include the turbine’s gearbox, controller, generator and brake.

GE Renewable Energy said that a prototype of the Haliade-X 12 MW would be installed onshore in the Netherlands in order to “simplify access for testing.” Another nacelle is being assembled with a view to testing it in “actual operational conditions” at a site in the U.K.

John Lavelle, the CEO of GE Renewable Energy Offshore Wind, said the firm was “on track to start commercializing this new product very shortly.”

As technology develops, the size of wind turbines is increasing. In September 2018, MHI Vestas Offshore Wind, a major player in the sector, launched the first commercially available double digit turbine, the V164-10.0 MW. The turbine has 80-meter long blades which weigh 35 tons each, and a tip height of around 187 meters.

The scale of GE Renewable Energy’s Haliade-X 12 MW turbine is also considerable. It will have a capacity of 12 megawatts, a height of 260 meters and a blade length of 107 meters. The turbine will generate 67 gigawatt hours of gross annual energy. The company has repeatedly described it as “the world’s largest offshore wind turbine.”

Source link

Continue Reading

Trending