London (AFP) – Stock markets marked time Friday as the latest trade-related rally lost steam as US President Donald Trump rated the chances of Washington striking a trade deal with the European Union at barely 50/50. Wall Street indices were marginally higher in morning trading as the S&P continued its recent hot streak as investors digested a mixed batch of corporate earnings. London, after a strong run on positive corporate news, finished slightly lower as did Frankfurt, while Paris closed just ahead after Asia lost ground.
Equities have enjoyed a strong run for much of July on expectations that governments around the world will reach agreements with the United States to dodge threatened tariffs before next Friday’s deadline. But Trump cautioned that in his view striking a deal with the European Union to reduce import tariffs will be a challenge. “I would say that we have a 50/50 chance, maybe less than that, but a 50/50 chance of making a deal with the EU,” Trump told reporters at the White House.
In the meantime, “there is no unifying theme across financial markets this month — instead markets are moving to the beat of their own drums,” concluded Kathleen Brooks, research director at XTB. Tesla, which had lost eight percent Thursday on lower profits and a “rough” outlook from CEO Elon Musk, regained almost five percent. Sentiment had been lifted earlier in the week by the announcement of a Japan-US deal, as well as signals that the EU could be closing in on its own accord with Washington.
The “momentum has not been kept up, and European stocks are weaker at the end of the week,” noted Brooks. Trade optimism stayed cautiously upbeat overall, as Brussels and Washington tried to steer towards a deal that would halve Trump’s threatened 30 percent levy, with a European Commission spokesman saying he believed an agreement was “within reach.” However, “there has been no confirmation from the US side. Thus, sentiment towards European assets could be fragile as we lead up to that August 1 tariff deadline,” Brooks added.
The EU is still forging ahead with contingency plans in case talks fail, with member states approving a 93 billion-euro ($109 billion) package of retaliatory counter-tariffs. With few positive catalysts to drive buying, Asian markets turned lower heading into the weekend. Tokyo retreated after a two-day rally, and Hong Kong declined following five days of gains. Shanghai was also down. While the S&P 500 and Nasdaq hit new records Thursday, another round of strong jobs data suggested the US Federal Reserve might have to delay cutting borrowing costs.
The dollar extended gains against its major peers. The US president once again pressed Fed chief Jerome Powell to slash interest rates during a visit to its headquarters on Thursday. In corporate news, German auto giant Volkswagen said US tariffs had cost it 1.3 billion euros ($1.5 billion) in the first half of the year as it reported falling profits. After an initial drop, shares in the carmaker rose four percent in Frankfurt. German sportswear maker Puma saw its shares tumble around 16 percent after slashing its sales forecast and warning of a full year loss.
– Key figures at around 1555 GMT –
New York – Dow: UP 0.2 percent at 44,764.12 points
New York – S&P 500: UP 0.2 percent at 6,378.79
New York – Nasdaq Composite: UP 0.2 percent at 21,106.04
London – FTSE 100: DOWN 0.2 percent at 9,119.32 (close)
Paris – CAC 40: UP 0.2 percent at 7,834.58 (close)
Frankfurt – DAX: DOWN 0.3 percent at 24,233.08 (close)
Tokyo – Nikkei 225: DOWN 0.9 percent at 41,456.23 (close)
Hong Kong – Hang Seng Index: DOWN 1.1 percent at 25,388.35 (close)
Shanghai – Composite: DOWN 0.3 percent at 3,593.66 (close)
Dollar/yen: UP at 147.77 yen from 146.94 yen on Thursday
Euro/dollar: DOWN at $1.1727 from $1.1756
Pound/dollar: DOWN at $1.3426 from $1.3507
Euro/pound: UP at 87.34 pence from 87.01 pence
West Texas Intermediate: DOWN 1.0 percent at $65.37 per barrel
Brent North Sea Crude: DOWN 0.8 percent at $68.62 per barrel
© 2024 AFP
