Morning Report

Thursday, 19 July 2018

  • Asian stocks edged slightly higher in early Thursday trade, taking cues from Wall Street’s advance.
  • U.S. markets rose, with strong earnings from Morgan Stanley and CSX buoying stocks.
  • Fed Chairman Jerome Powell reinforced his upbeat view on the U.S. economy.
  • White House economic advisor Larry Kudlow said trade talks with China had stalled.
  • Oil prices gain as markets shrugged off the unexpected build in U.S. crude stockpiles.

Asian shares carved out moderate gains in early Thursday trade, taking cues from Wall Street’s overnight advance as investors there parsed through stronger-than-expected corporate earnings.

The Nikkei 225 edged higher by 0.15 percent while the broader Topix slipped 0.08 percent. In South Korea, the Kospi tacked on 0.2 percent. Australia’s S&P/ASX 200 drifted higher by 0.08 percent.

The slight gains in Asian trade came after markets stateside closed higher for the most part on Wednesday as stocks were buoyed by strong corporate earnings reports from Morgan Stanley and rail transportation company CSX.

The Dow Jones Industrial Average rose 0.32 percent, or 79.40 points, to close at 25,199.29, its fifth straight positive session. The S&P 500 advanced 0.22 percent to 2,815.62 and the Nasdaq Composite closed nearly flat at 7,854.44.

Meanwhile, Federal Reserve Chairman Jerome Powell mostly reinforced his upbeat view on the U.S. economy in his second testimony to congress in the week. Analysts, however, pointed out that Powell had said the U.S. was “close to full employment, maybe not quite there.”

On the trade front, White House economic advisor Larry Kudlow said trade talks with China have stalled. However, negotiations with other trading partners could prove to be more promising, with Kudlow adding that a trade offer from the European Union was in the works. Also of note, Trump on Wednesday said the U.S. could “do a deal separately” with Mexico and Canada, raising questions over the fate of the North American Free Trade Agreement (NAFTA).

The dollar index, which tracks the dollar against a basket of currencies, slipped from a three-week high but stayed above the 95 handle at 95.068. The People’s Bank of China (PBOC) set the Yuan reference rate at 6.7066 vs. the previous day’s fix of 6.6914.

On the energy front, oil prices held onto overnight gains made as the unexpected rise in U.S. crude inventories was overshadowed by U.S. demand data for gasoline. U.S. crude futures edged up by 0.25 percent to trade at $68.93 per barrel and Brent crude was mostly stable at $72.93.

Source : Reuters

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