Arbuthnot Banking (LSE:ARBB)
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By Anna Isaac
-- European, Asian stocks little changed
-- U.S. stock futures flat
-- Treasury yields tick down
Global stocks paused on Tuesday as investors took a wait-and-see approach to trade developments and the Federal Reserve's next policy moves.
The Stoxx Europe 600 bounced between small gains and losses, with rises in its health-care constituents mostly offset by weakness in its banking and auto sectors. U.S. stock futures were also broadly flat.
Gregory Perdon, co-chief investment officer at Arbuthnot Latham, said, "There's definitely selloff fatigue at the moment. I think we're really just in a sideways summer of trading activity."
Home Depot shares gained 1% in U.S. premarket trading after the company reported earnings that beat expectations, even as it cut its sales forecast and warned the potential effects of tariffs could weigh on growth.
In Asia, major indexes were mostly positive or flat, though Hong Kong's Hang Seng slipped 0.2% as recent political protests put pressure on the city's government to enter talks. Japan's Nikkei gained 0.6% and the Korean Kospi jumped more than 1%.
On Monday, President Trump resumed his social-media criticism of the U.S. central bank, saying it had showed "horrendous lack of vision." He said the Fed should instigate a rate cut of 1%, a level of action normally associated with a severe downturn. He also called for a package of measures such as quantitative easing to stimulate the economy and efforts to address dollar strength.
Investors will pay close attention to the minutes from the Federal Reserve's latest meeting on Wednesday, as well as any statements from Chairman Jerome Powell ahead of the economic symposium in Jackson Hole, Wyo., starting on Friday.
The U.S. dollar was unchanged on Tuesday, holding on to its recent gains. It would likely stay strong ahead of the gathering, said Fritz Louw, currency analyst at MUFG bank.
"There's nothing ahead of the week that is going to weaken the dollar. If there isn't dovish capitulation from the Fed on Friday then we will see more dollar strength," he said.
In that case, "there would likely be some more pressure from Mr. Trump," he added.
White House officials also said Monday they were weighing a range of actions that could boost business and spending activity.
However, Arbuthnot Latham's Mr. Perdon said that sharp downturn fears and the need for rate cuts may have been overblown, adding that the response to the financial crisis from the Fed continued to distort bond-yield curves, he said.
"I would be surprised if members of the Fed would allow themselves to get overly intimidated by the rhetoric," he said.
Yields on U.S. 10-year Treasurys fell to 1.564% Tuesday, from 1.603% on Monday when they saw their biggest gain since July 5. Bond yields fall as prices rise.
Write to Anna Isaac at firstname.lastname@example.org
(END) Dow Jones Newswires
August 20, 2019 07:50 ET (11:50 GMT)
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