BCN-01,02 Markets underwhelmed by US growth surge
Markets underwhelmed by US growth surge
NEW YORK, July 28, 2018 (BSS/AFP) – Wall Street stocks on Friday finished
the week on a downbeat note, with the tech-rich Nasdaq sinking 1.5 percent on
worries that US economic growth has peaked.
The American economy expanded at an annual rate of 4.1 percent in the
second quarter, matching analyst expectations, due in part to strong consumer
spending and a trade-war driven bump in exports, according to Commerce
Department data. That is the fastest growth in almost four years.
President Donald Trump hailed the figure as an “American economic
miracle,” promising more impressive growth ahead.
But US investors seemed to be betting on the opposite, sending stocks
lower and punishing technology companies especially hard.
“There’s a general sense that maybe we’re hitting peak growth,” said Jack
Ablin of Cresset Wealth Advisors.
Ablin said the tech sector was vulnerable because it is tied more closely
to growth than some sectors and because of worries that rising political and
social scrutiny of Facebook and others that could crimp growth.
The declines in the United States also followed a largely disappointing
round of earnings, with Exxon Mobil, Intel and Twitter all falling
European shares closed with higher gains. London finished 0.5 percent
higher, with shares in telecoms group BT rising more than 5 percent after
posting better-than-expected first-quarter earnings.
Paris climbed 0.6 percent while Frankfurt added 0.4 percent in value,
aided partly by this week’s easing in EU-US trade tensions.
Asian stocks mostly edged higher Friday with Tokyo buoyed once more by a
weaker yen, which helps exporters.
– ‘Come off the boil’ –
While the strong US growth rate was welcome, analysts said investors had
plenty to worry about from here on.
WORLD-MARKETS 2 LAST NEW YORK
“The US economy is likely to come off the boil in the coming quarters as
the boost to growth delivered by the tax cuts begins to wear off, trade
restrictions and an overall slowing of the global economy start to weigh on
exports, and further interest rate hikes tighten financial conditions,” said
economist Pablo Shah at the Centre for Economics and Business Research.
He said the growth rate was nonetheless impressive and that the strong
labor market together with still-accommodative fiscal and monetary policies
meant the United States was likely to remain at the top of the growth pack
among advanced nations.
– Key figures at 2100 GMT –
New York – Dow: DOWN 0.3 percent to 25,451.06 (close)
New York – S&P 500: DOWN 0.7 percent at 2,818.82 (close)
New York – Nasdaq Composite Index: DOWN 1.5 percent at 7,737.42 (close)
London – FTSE 100: UP 0.5 percent at 7,701.31 (close)
Frankfurt – DAX 30: UP 0.4 percent at 12,860.40 (close)
Paris – CAC 40: UP 0.6 percent at 5,511.76 (close)
EURO STOXX 50: UP 0.6 percent at 3,528.08 (close)
Tokyo – Nikkei 225: UP 0.6 percent at 22,712.75 (close)
Hong Kong – Hang Seng: UP 0.1 percent at 28,804.28 (close)
Shanghai – Composite: DOWN 0.3 percent at 2,873.59 (close)
Euro/dollar: UP at $1.1658 from $1.1643 at 2100 GMT
Pound/dollar: DOWN at $1.3107 from $1.3109
Dollar/yen: DOWN at 110.99 yen from 111.23 yen
Oil – Brent Crude: DOWN 25 cents at $74.29 per barrel
Oil – West Texas Intermediate: DOWN 92 cents at $68.69 per barrel