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Global Stocks Rise, With All Eyes on the Fed

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08/23/2019 | 06:39am EDT

By Caitlin Ostroff

-- U.S. stock futures rise

-- European, Asian stocks up

-- Treasury yields tick higher

Global stocks climbed on hopes of clear signals of interest-rate cuts ahead of a closely watched speech from Federal Reserve Chairman Jerome Powell later in the day.

The Stoxx Europe 600 gained 0.5% in late-morning trade after a broadly positive session in Asia, with the U.K.'s FTSE 100 up 0.8% and the German DAX up 0.4%.

In the U.S., futures on the S&P 500 were up and Dow Jones Industrial Average futures gained 0.3%. Futures don't necessarily predict moves after the opening bell.

Markets will be watching for clarity from Mr. Powell and other central-bank leaders at the Jackson Hole symposium on the likelihood of further moves to lift a stagnant global economy.

Lower interest rates would likely drive down bond yields further and rally equities, said Connor Campbell, a financial analyst for Spreadex. "They're putting a lot of their eggs in a central-bank basket," Mr. Campbell said of stock-market investors.

Mr. Powell is set to speak Friday at 10 a.m. ET. Bank of England Gov. Mark Carney will speak later in the day.

Analysts said the Fed chairman will have to show he is willing to take strong action to support the economy. Dallas Fed President Robert Kaplan said Thursday at the gathering of central bankers that he was open to cutting rates in September.

Though Mr. Kaplan came out in support, other officials were split. In television interviews Thursday, the head of the Kansas City Fed and the Philadelphia Fed pushed back against the need for further rate cuts. The Fed's July rate move lowered its benchmark rate to a range between 2% and 2.25%.

Friday's rises in stocks came a day after a series of weak manufacturing data around the world had raised concerns about a possible recession, weighing on U.S. indexes.

The yield on 10-year Treasurys rose to 1.647% on Friday, from 1.613% on Thursday, while the two-year Treasury yield rose to 1.638%, from 1.606%. Bond yields and prices move in opposite directions.

The 10-year yield on Thursday briefly fell below two-year yields, following a similar move last week. The inversion between short and long-term yields has been widely viewed as a possible recession signal.

Gains in Europe were led by technology firms, with the sector up 1.3%.

Toronto-based and U.K.-listed Entertainment One's shares jumped 31% after toy maker Hasbro said it would buy it for $4 billion.

In currencies, the pound fell 0.3% against the U.S. dollar to $1.2210. Sterling also fell against the euro by 0.1%.

The WSJ Dollar Index, which measures the currency against a basket of its peers, ticked up 0.3%.

Stocks mentioned in the article
ChangeLast1st jan.
DAX 0.08% 12468.01 Delayed Quote.17.98%
DJ INDUSTRIAL -0.19% 27036.8 Delayed Quote.16.37%
EURO / US DOLLAR (EUR/USD) -0.29% 1.10134 Delayed Quote.-3.81%
FTSE 100 INDEX 0.28% 7234.11 End-of-day quote.0.00%
HASBRO, INC -1.71% 118.855 Delayed Quote.48.82%
NASDAQ 100 -0.66% 7846.554046 Delayed Quote.24.63%
NASDAQ COMP. -0.54% 8136.792059 Delayed Quote.23.37%
S&P 500 -0.18% 3000.75 Delayed Quote.19.94%
STOXX EUROPE 600 0.29% 392.95 Delayed Quote.15.31%
STOXX EUROPE 600 NR 0.29% 845.04 Delayed Quote.18.30%
US DOLLAR INDEX -0.29% 98.27 End-of-day quote.1.64%
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