Asian Stock Gains Muted; Dollar Slips on Powell: Markets Wrap

25 basis point cut priced in. Will he go further

Asian Stock Gains Muted; Dollar Slips on Powell: Markets Wrap

USA stocks edged higher on Thursday on improved bets of an interest rate cut following Fed chief Jerome Powell's dovish remarks, while healthcare stocks were mixed after the Trump administration withdrew a rule that would kill rebates.

The Dow Jones Industrial Average .DJI rose 227.88 points, or 0.85%, to 27,088.08, the S&P 500 .SPX gained 6.84 points, or 0.23%, to 2,999.91 and the Nasdaq Composite .IXIC dropped 6.49 points, or 0.08%, to 8,196.04.

Early in the trading session, the broad-based S&P 500 on Wednesday hit 3,000 for the first time before paring gains somewhat, while the NASDAQ, the home of major tech companies, finished at a record. The S&P 500 is on track to climb to a fresh all-time high on Thursday, having ended just some three points below the record it set on July 3.

The headline June producer price index (PPI) is expected to register as flat month-over-month for June, according to consensus economists polled by Bloomberg, retreating from a 0.1% month-over-month increase in May.

This could be bullish for gold because it would raise concerns about the global economy and possibly put a 50-basis point rate cut back on the table.

Powell's comments in a second day of testimony on Capitol Hill suggest the Fed is more comfortable keeping short-term interest rates low and suggests that Fed policymakers may cut rates at its meeting later this month.

Powell emphasized trade tensions and concerns over the strength of the global economy in his half-yearly testimony before the US House Financial Services Committee.

Federal Reserve Board Chairman Jerome Powell speaks during a news conference after a Federal Open Market Committee meeting January 30, 2019 in Washington, DC. On Thursday, President Trump said that China hasn't followed through on its promise to by US agricultural products.

Speaking at a Senate Banking Committee hearing in Washington, Powell said immigration and tariffs combined with rising material costs are making it more hard for homebuilders to build homes affordably, according to CNBC.

Powell testifies to Senate Banking Committee on ThursdayECB minutes are due on Thursday.A key measure of USA inflation - the core consumer price index, due Thursday - is expected to have increased 0.2% in June from the prior month, while the broader CPI is forecast to remain unchanged.US producer prices are due on Friday.

The euro slipped versus the dollar after European Central Bank Governing Council member Ignazio Visco said the ECB will need to adopt further expansionary measures if the euro zone economy does not pick up and will consider its options "in the coming weeks".

But on Thursday, Fed Chair Jerome Powell had something to say about the president. USA futures ticked higher.

The cooling in United States rate fever has seen bonds give back just a little of their huge rally, with yields on two-year Treasuries rising to 1.909 percent from the recent trough of 1.696 percent.

Trump has criticized Powell and his colleagues on a regular basis for nearly a full year - first calling on the Fed to stop, and then to reverse, its 2018 interest-rate increases.

Latest News