By Anna Hirtenstein
Global stocks drifted Friday as investors began winding down their books in the days leading up to the year-end holiday period, and banks looked to shore up capital.
Futures tied to the Dow Jones Industrial Average index were mostly flat, a day after the gauge once again climbed to a record. The Stoxx Europe 600 index climbed 0.3% and Germany's DAX index added 0.5%. France's CAC 40 rose 0.3%.
Trading volumes tend to slip toward the end of the year as the biggest banks scale back lending and trading activity in an effort to bolster their balance sheets and meet regulatory requirements. The Federal Reserve Bank of New York also temporarily injected roughly $57.52 billion into financial markets Thursday to make sure there is enough liquidity to keep short-term borrowing rates stable.
"What tends to happen around this time of year is people squaring off their books as they head off for the holidays," said James Athey, a senior investment manager at Aberdeen Standard Investments. "Because of the nature of banking regulation, around the quarter end, you get banks tidying up their books in order to look whiter than white in front of the regulator when snapshots are taken at the year-end."
In the U.K., the pound rose about 0.3% against the U.S. dollar after fresh data showed that economic growth for the third quarter was slightly higher than expected. Prime Minister Boris Johnson's Brexit bill vote is also likely to be approved by lawmakers on Friday, clearing an important hurdle in the Brexit process.
Later in the day, the Commerce Department will put out consumer spending figures, offering insights into how retailers may be faring during the crucial holiday spending season. The Federal Reserve's preferred inflation gauge will also be released, and is projected to show a 1.6% increase over last year.
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