Today's Stock Market Update: Global Shares Rally as Focus Shifts to Earnings and Economies

29 Aug, 2023

Today's Stock Market Update: Global Shares Rally as Focus Shifts to Earnings and Economies

Global markets saw an uptick on Tuesday, redirecting attention from the U.S. Federal Reserve toward corporate earnings reports and economic indicators. In early trading, France's CAC 40 increased by 0.4% to reach 7,353.98, while Germany's DAX gained almost 0.5% at 15,866.60. The UK's FTSE 100 surged significantly by 1.6% to 7,456.28. U.S. shares indicated a slight upward drift, with Dow futures up by less than 0.1% at 34,604.00, and S&P 500 futures rising nearly 0.1% to 4,445.50.

Asian markets were buoyed by signs of potential improvement in China-U.S. relations, as both nations expressed commitment to address economic ties, including trade and business interactions. Clifford Bennett, the chief economist at ACY Securities, noted that the positive response from markets reflects a much-needed pragmatic breakthrough, though time will be the ultimate judge of its effectiveness.

Amidst hopes of improved bilateral communication, U.S. Commerce Secretary Gina Raimondo announced that she and her Chinese counterpart agreed to share information on U.S. export controls and establish a platform to discuss other commercial matters. However, underlying conflicts concerning technology, security, and human rights persist.

Japan's Nikkei 225 inched up 0.2% to conclude at 32,226.97. Meanwhile, Toyota encountered a setback as all its auto assembly lines across 14 plants in Japan, totaling 28 lines, were temporarily halted due to a computer system issue related to incoming auto parts. Toyota shares closed 0.2% lower. The company denied any cyberattack involvement but is still investigating the root cause and timeline for resuming operations. Specific models affected by the production stoppages were not specified.

Australia's S&P/ASX 200 rose by 0.7% to 7,210.50. South Korea's Kospi increased by 0.3% to 2,552.16. Hong Kong's Hang Seng experienced a notable surge of 2.0% to reach 18,484.03, and the Shanghai Composite gained 1.2% to 3,135.89.

Investors have a data-packed week ahead, anticipating economic reports that could provide insights into the status of the job market's strength and inflation's trajectory. Updates on consumer confidence are expected to show continued strength in August, following a sharp increase in July. Job openings data for July will be released on Tuesday, with the broader jobs report for August scheduled for Friday. The job market's resilience amid persistent inflation remains a key focal point.

Market watchers and economists are keenly awaiting the government's latest inflation update on Thursday, centered around the personal consumption and expenditures report, which the Federal Reserve considers its preferred measure for tracking inflation's course towards the 2% target. The central bank has already taken steps to address high inflation by raising its main interest rate to the highest level since 2001.

While the Fed maintained rates at its recent meeting, speculation lingers about the potential for future rate hikes to combat ongoing inflation. According to CME's FedWatch tool, Wall Street is leaning towards the Fed keeping rates steady at the September meeting. However, opinions are nearly evenly divided on whether another rate hike is probable before the close of 2023.

Energy trading witnessed benchmark U.S. crude oil increasing by 55 cents to reach $80.65 per barrel. The international standard, Brent crude, rose by 59 cents to $85.01 per barrel.

In currency trading, the U.S. dollar saw a slight increase against the Japanese yen, rising from 146.54 yen to 146.62 yen. The euro dipped from $1.0823 to $1.0812.