Home World News Stocks steady after Trump-Kim summit, investors eye Federal

Stocks steady after Trump-Kim summit, investors eye Federal

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NEW YORK: Wall Street made modest gains on Tuesday while the US dollar rose slightly against a basket of major currencies, with only muted impact from the long-awaited US-North Korea summit aimed at denuclearizing the Korean peninsula.

Investors were more focused on the start of a two-day policy meeting of the Federal Reserve, looking for hints as to whether the US central bank would move to raise rates three or four times this year.

“I don’t think (the Fed) is going to say anything particularly related to a rate hike in December,” said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC in New York. “If they say a little too much about inflation, that’s going to give the market a reason to get concerned.”

The Dow Jones Industrial Average fell 1.58 points, or 0.01 per cent, to 25,320.73, the S&P 500 gained 4.85 points, or 0.17 per cent, to 2,786.85, and the Nasdaq Composite added 43.87 points, or 0.57 per cent, to 7,703.79.

Twitter Inc rose 5.0 per cent after J.P. Morgan raised its price target on the stock by $11 to $50, while Tesla shares gained 3.2 per cent after the company said it is cutting several thousand jobs as part of efforts to become profitable.

After the closing bell, AT&T won US court approval to buy Time Warner Inc for $85 billion. AT&T shares fell 2.6 per cent and Time Warner shares rose 3.8 per cent, in extended trading following the decision.

The dollar index rose 0.24 per cent, steadied in part by data showing that US consumer prices increased in May amid a slowdown in the rise of gasoline costs.

The euro was down 0.28 per cent to $1.1749.

SUMMIT SHRUGGED OFF

US President Donald Trump and North Korean leader Kim Jong Un met in Singapore, pledging to work toward complete denuclearization, while Washington committed to providing security guarantees for its old enemy.

The MSCI all-country world index, which tracks shares in 47 countries, gained 0.06 per cent.

Investors had mixed reactions to the summit, which ended with the signing of a joint statement that gave few details on how the goals set by both sides would be achieved.

“Any de-escalation is good,” said Ian Ormiston, a European fund manager with Old Mutual Global Investors.

Others felt the sit-down between Trump and Kim did little to change the game.

“This is more of a case of ‘we’ll believe it when we see it,’ rather than actually reacting,” said Brad McMillan, chief investment officer for Commonwealth Financial in Waltham, Massachusetts.

Investors were more focused on the Fed meeting and policy meetings later in the week of the European Central Bank and the Bank of Japan, as well as the positive US inflation data.

The Fed is expected to raise interest rates at the close of its meeting on Wednesday.

“We’re eagerly awaiting the Fed, the ECB and the BOJ, in that order,” said Gregory Anderson, global head of FX strategy at BMO Capital Markets in New York. “People are reluctant to do a whole lot ahead of that.”

Benchmark 10-year US Treasury notes last fell 2/32 in price to yield 2.9645 per cent, from 2.957 per cent late on Monday.

The 30-year bond last rose 1/32 in price to yield 3.0952 per cent, from 3.097 per cent.

US crude rose 0.39 per cent to settle at $66.36 per barrel, and Brent settled at $75.88, down 0.76 per cent, as investors prepared for a key meeting of the OPEC producer group next week.

In Europe, the regional FTSEurofirst 300 index lost 0.02 per cent, and the spread between Italian and German 10-year borrowing costs narrowed as the US-North Korea summit drew to a close, following a rally on Monday after reassuring comments from Italy’s new economy minister.

The European Central Bank meets on Thursday, with some expecting it to provide guidance for ending its bond-buying program at the end of this year.

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