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U.S. GDP best in two years, inflation, jobs now seen as key
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Buffett says stocks still beating bonds; gasoline extends gain
European shares gained a second day after after data underscored the resilience of the American and Chinese economies, and billionaire investor Warren Buffett said he still prefers stocks to bonds. The dollar was steady as Treasury yields rose a second day.
The Stoxx Europe 600 Index followed gains in equity benchmarks from Tokyo to Sydney after U.S. equities advanced for a fourth day. The dollar was steady after rallying from the lowest in two years Wednesday as second-quarter U.S. growth figures were revised up. Most European bonds declined, while gasoline advanced as Harvey continued to pound the energy-rich Gulf of Mexico coast, home to more than half of the U.S.’s refining capacity.
Buffett said the rally in markets over the last several years has made it harder to find bargains, but that stocks remain attractive. Adding to the mood of optimism, data Thursday showed China’s official factory gauge further strengthened in August while reports Wednesday showed U.S. second-quarter growth reached the fastest pace in two years and hiring was robust. Data on U.S. personal consumption data today and jobs tomorrow will be parsed for clues on the timing of the Federal Reserve’s next rate move.
President Donald Trump signaled he’s running out of patience with Kim Jong Un’s regime after the latest provocation in which Pyongyang sent a missile over Japan earlier this week. Trump dismissed the idea of negotiating, while his defense chief said the U.S. hasn’t given up on diplomatic options. Meanwhile, Japanese Foreign Minister Taro Kano and U.S. Secretary of State Rex Tillerson agreed in a phone call to send a clear message to prevent North Korea from taking further actions and to prepare additional sanctions.
Storm Harvey returned to land and is poised to dump more rain over Texas and Louisiana. Refineries have been battered, with more than an estimated 4 million barrels a day — or about 23 percent of U.S. refinery capacity — getting hit.
Terminal subscribers can read more on our Markets Live blog.
Among other key events this week:
- Among economic releases in Europe on Thursday: Germany July retail sales and August unemployment, as well as euro-area July CPI and unemployment.
- The U.S. releases on Thursday a key personal consumption expenditure report that the Federal Reserve looks at, ahead of jobs data out on Friday.
And here are the main moves in markets:
Stocks
- The Stoxx Europe 600 Index gained 0.5 percent as of 10:08 a.m. in London.
- The U.K.’s FTSE 100 Index added 0.6 percent, the most in a week.
- Germany’s DAX Index advanced 0.5 percent.
- Futures on the S&P 500 Index climbed 0.4 percent.
Currencies
- The Bloomberg Dollar Spot Index increased 0.1 percent.
- The euro climbed 0.1 percent to $1.1897.
- The British pound slipped 0.3 percent.
- The Japanese yen fell 0.2 percent to 110.48 per dollar, the weakest in two weeks.
Bonds
- The yield on 10-year Treasuries advanced one basis point to 2.15 percent.
- Germany’s 10-year yield increased one basis point to 0.37 percent.
- Britain’s 10-year yield climbed less than one basis point to 1.04 percent.
Commodities
- Gold dipped 0.1 percent to $1,307.69 an ounce.
- West Texas Intermediate crude increased 0.3 percent to $46.10 a barrel.
- Gasoline for September advanced for an eighth day, up more than 4.4 percent to $1.9673 a gallon. Earlier the front-month contract touched the highest since July 2015.
Asia
- The Topix index rose 0.6 percent at the close in Tokyo, paring its first monthly drop since March. Australia’s S&P/ASX 500 Index added 0.8 percent. The Kospi retreated 0.4 percent.
- Benchmark indexes dropped 0.6 percent in Hong Kong and fell in Shanghai, led by declines in banking stocks that had recently been surging.
By Robert Brand
August 31, 2017, 7:11 PM GMT+10
— With assistance by Andreea Papuc
Source: Bloomberg