U.S. Stocks Near Record Highs: Markets Respond to Economic Data
Global stock markets showed mixed performances on Friday, with U.S. stocks inching closer to record highs after economic data aligned closely with expectations. Futures for the S&P 500 and Dow Jones Industrial Average were up 0.2% and 0.1%, respectively, as traders weighed recent economic reports and upcoming Federal Reserve decisions.
European Markets Mostly Higher: ECB Cuts Rates to Spur Growth
European stocks were mostly higher in early trading following the European Central Bank’s decision on Thursday to reduce interest rates again in an effort to combat sluggish growth and declining inflation. France’s CAC 40 rose 0.3% to 7,454.10, and Germany’s DAX added 0.4% to 18,595.43. The UK’s FTSE 100 edged down 0.1% to 8,234.25.
China Hits PwC with Ban and Fine: Impact of Evergrande Collapse
In China, regulators imposed a six-month ban on the accounting firm PwC and fined it over 400 million yuan ($56.4 million) for its involvement in the audit of Evergrande, the world’s most indebted property developer. This marks the toughest penalty yet for an international accounting firm in China and reflects the growing scrutiny of global auditors operating within the country.
Mixed Performance in Asia: Hang Seng Rises, Shanghai Composite Falls
Asian markets also had a mixed session. Hong Kong’s Hang Seng rose 0.8% to 17,369.09, while China’s Shanghai Composite fell 0.5% to 2,704.09. Investor sentiment in China was weighed down by news that the government will raise the retirement age and concerns about the sustainability of the nation’s pension system. China’s upcoming economic data release on Saturday is expected to show slowing growth in industrial production, fixed asset investment, and retail sales.
Japan’s Nikkei Slips on Stronger Yen and Economic Data
Japan’s Nikkei 225 fell 0.7% to close at 36,581.76 despite data showing a 2.9% year-on-year increase in industrial production for July. The stronger yen, which fell to 141.68 against the dollar, added pressure on Japanese exports. Analysts anticipate no immediate rate changes from the Bank of Japan at its upcoming meeting, though there is speculation of a more hawkish stance emerging in the months ahead.
Broader Asian Market Moves: Gains in Australia and South Korea
Elsewhere in Asia, Australia’s S&P/ASX 200 rose 0.3% to 8,099.90, while South Korea’s Kospi edged up 0.1% to 2,575.41. Both markets saw moderate gains as investors remained cautious ahead of key economic data.
U.S. Markets Closer to Record Levels: Tech Stocks Lead Gains
The S&P 500 rose 0.7% on Thursday, climbing to 5,595.76 and nearing its July record. The Dow Jones Industrial Average gained 0.6% to 41,096.77, and the Nasdaq Composite advanced 1% to 17,569.68. Despite concerns about inflation and economic slowdown, markets are on track for a fourth winning week in the last five.
Economic Data Points to Modest Inflation: Rate Cuts Likely Next Week
Recent U.S. data showed a slight increase in unemployment claims, while wholesale inflation rose by 1.7% in August, a slowdown from July’s rate. The data aligns with consumer inflation trends, reinforcing expectations of a quarter-point rate cut from the Fed next week rather than a larger half-point reduction. Lower rates are seen as supportive of economic growth but may also keep inflationary pressures alive.
Energy Markets See Modest Gains: Oil Prices Rise
In energy trading, benchmark U.S. crude gained 48 cents to $69.45 per barrel, while Brent crude added 50 cents to $72.47.
Currency Markets: Euro Strengthens Against the Dollar
The euro strengthened slightly, trading at $1.1088, up from $1.1074, as investors continued to monitor economic data and central bank policies globally.
Overall, global markets are navigating a complex landscape of economic data, central bank actions, and geopolitical developments as investors seek direction amid mixed signals.
