By Paul J. Davies
Global stocks wavered Wednesday, following a strong close in the U.S. overnight after President Trump suggested a U.S.-China trade deal could still be in the cards.
The Stoxx Europe 600 slipped 0.3% in opening trade. Germany's DAX was also down 0.3%, despite data showing the country's economy rebounded in the first quarter, when it expanded 0.4%.
Meanwhile, Asian shares were broadly higher, even after economic figures from China showed that industrial production, retail sales and fixed-asset investment all slowed in April.
Shares in Shanghai were nearly 2% higher, Hong Kong's Hang Seng Index was up 1% and Japan's Nikkei gained 0.6%.
In the U.S. futures pointed to a mixed open on Wall Street, with the S&P 500 up 0.1% and the Dow Jones Industrial Average down 0.1%.
Sebastien Galy, senior macro strategist at Nordea Investment, said investors in China seemed to react to the weak economic data by assuming that the government would bring more economic stimulus measures, sending stocks higher. The buying, he thought, was driven mainly by those who had been underinvested in the early part of the year.
"What seems to be happening is that many had missed the rally since December and were waiting to buy on a dip," he said. "With such a psychology, a shock that should be sizable seems to fade faster."
In Germany, the first-quarter growth was mainly domestically driven, with stronger private consumption and construction at home. Carsten Brzeski, ING's chief economist in Germany, said the data confirmed his view that not all is bad in the economy there, although investors shouldn't get overexcited as industry was still struggling and the country would face more headwinds this year.
"Today's German GDP data are in our view not necessarily the 'return of the living dead' as we still see the growth potential of the German economy, particularly if investments finally pick up," Mr. Bzreski said. "Instead, strong German data are rather another illustration that the condemned (often) live longer."
The WSJ Dollar Index, which measures the dollar against a basket of currencies, was flat.
The yield on 10-year U.S. Treasurys dipped to 2.397%, from 2.421% on Tuesday. German 10-year bund yields dropped further into negative territory on Wednesday, hitting -0.097%, from -0.074% on Tuesday.
Brent crude oil, the global benchmark, was down 0.24% at $71.07 per barrel. Gold was nearly flat at $1,296.60 an ounce.
Write to Paul J. Davies at email@example.com