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Global stocks mixed as ‘contentious’ G7 summit looms
NEW YORK, June 7, 2018 (BSS/AFP) – Global stocks were mixed on Wednesday
as investors girded themselves for what German Chancellor Angela Merkel
called a “contentious” summit of Group of Seven nations later this week.
European stocks were little changed but Wall Street posted handsome gains,
lifted by a rally in bank shares and some industrial companies.
The Dow gained 1.4 percent and the Nasdaq ended at its third straight
record.
But policy makers were readying themselves for some awkward exchanges at
this weekend’s G7 summit in Quebec, which comes after US President Donald
Trump slapped Canada, Mexico and the European Union with steel and aluminum
tariffs.
In response to Trump’s punitive tariffs on metals, Canada, the EU and
Mexico have all announced retaliatory measures.
“We know certainly that there will be frank and sometimes difficult
discussions around the G7 table, particularly with the US president on
tariffs,” Canadian Prime Minister Justin Trudeau.
Trudeau had hoped to put the focus on jobs, security concerns, cleaning up
the world’s oceans and empowering women. But officials have conceded the G7
agenda is likely to be overtaken by trade disputes.
– ‘Buckle up’ –
“Investors should buckle up for a potential showdown as trade is expected
to be a major talking point throughout the summit,” said FXTM analyst Lukman
Otunuga. “With escalating trade tensions seen as a significant threat to
global economic growth, this could be a G7 meeting like no other.”
Meanwhile, official data showed that the US trade deficit narrowed in
April for a second straight month.
The total trade deficit fell 2.1 percent for April to $46.2 billion after
a downward revision for March. The result was better than analysts expected
since the consensus forecast called for an increase.
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The ECB’s chief economist Peter Praet said policymakers would discuss when
to wind down the massive bond-buying scheme that has propped up the eurozone
economy for the past three years.
Praet’s comments helped lift the euro and also reverberated through US
markets.
Analysts said the comments confirmed a process of monetary tightening and
this lifted US Treasury yields and boosting expectations that banks would
make more money from higher interest rates.
JPMorgan Chase, Citigroup and Bank of America all won at least two
percent.
Another outperformer was Tesla Motors, which soared 9.7 percent as chief
executive Elon Musk expressed confidence that the company would reach
production targets for its Model 3 sedan.
– Key figures around 2100 GMT –
New York – Dow Jones: UP 1.4 percent at 25,146.39 (close)
New York – S&P 500: UP 0.9 percent at 2,772.35 (close)
New York – Nasdaq: UP 0.7 percent at 7,689.24 (close)
London – FTSE 100: UP 0.3 percent at 7,712.37 (close)
Paris – CAC 40: DOWN 0.1 percent at 5,457.56 (close)
Frankfurt – DAX 30: UP 0.3 percent at 12,830.07 (close)
EURO STOXX 50: UP 0.1 percent at 3,460.12 (close)
Tokyo – Nikkei 225: UP 0.4 percent at 22,625.73 (close)
Hong Kong – Hang Seng: UP 0.5 percent at 31,259.10 (close)
Shanghai – Composite: FLAT at 3,115.18 (close)
Euro/dollar: UP at $1.1774 from $1.1718 at 2100 GMT on Tuesday
Pound/dollar: UP at $1.3413 from $1.3393
Dollar/yen: UP at 110.19 yen from 109.79 yen
Oil – Brent Crude: DOWN 2 cents at $75.36 per barrel
Oil – West Texas Intermediate: DOWN 79 cents at $64.73 per barrel
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