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Stock markets pare losses as G-7 leaders feud over trade


U.S. stocks pared most of their losses, trading nearly flat on Friday as investors attempted to brush aside tensions between the U.S. and major allies as a meeting of leaders of the Group of Seven industrialized nations got under way in Canada.

The main benchmarks were still on track for weekly gains.

What are markets doing?

The Dow Jones Industrial Average

DJIA, +0.20%

 ventured into positive territory, trading marginally higher at 25,253.

The S&P 500

SPX, +0.15%

 was flat at 2,770, with consumer staples shares leading gains. Meanwhile, the Nasdaq Composite Index

COMP, +0.05%

 was off 7 points, or 0.1%, to 7,627.

The Dow was heading for a 2.5% weekly advance, while the S&P was up 1.3% and the Nasdaq was 1% higher.

What is driving the market?

The cautious mood on Friday comes as G-7 gathered in Canada for a two-day summit where trade issues will be in focus. Hostilities between Trump and leaders of two close allies—Canada and France—intensified ahead of the meeting after a dispute erupted, mainly on Twitter.

See also: Trump lashes out at Canada, France over trade—and will bail on G-7 summit early

Read: Heading into G-7, Trump’s Mr. Unpopular on the world stage

The U.S. president is now planning to leave the G-7 summit early, to go to Singapore ahead of his scheduled meeting there with North Korea leader Kim Jong Un on Tuesday.

Away from international relations, investors are starting to focus on central bank meetings next week. The Federal Reserve is expected to raise interest rates while European Central Bank policy makers are expected to announce when they will stop purchases assets under their quantitative easing program.

What are strategists saying?

“There is still a cloud over the markets because of trade issues and we see little upside in the near term,” said Lindsey Bell, investment strategist at CFRA Research.

“But the market is also accepting that there will be no major revelations from the G-7 or the North Korea Summit,” Bell added.

Stock movers

Broadcom Inc.

AVGO, -2.19%

 dropped 3.5% after reporting earnings late Thursday.

DocuSign Inc.

DOCU, +7.04%

 rallied 9% after the tech company’s earnings out late Thursday beat forecasts.

U.S.-listed shares of Deutsche Bank AG

DBK, +0.46%

DB, -2.26%

 fell 3.3% ahead of the bell. Bloomberg reported that the German lender is exploring options to merge with rival Commerzbank AG

CBK, -1.80%

What’s on the economic calendar?

In a relatively quiet day for economic data. Wholesale inventories climbed 0.1 per cent in April from the previous month to $603.2bn, against expectations for inventories to remain unchanged. Still, the gain was the weakest in six months.

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