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EUROPE-STOCKS-MARKETS
Stocks rise as US economy roars to life
LONDON, July 28, 2018 (BSS/AFP) – Wall Street wavered Friday despite data
showing the US economy expanded at the fastest annual growth rate in almost
four years.
The world’s biggest economy grew at an annual rate of 4.1 percent in the
second quarter, the fastest rate among industrialised nations, the US
Commerce Department said.
The figure was roughly in line with the forecasts of analysts, who had
expected that US President Donald Trump’s massive $1.5-trillion of tax cuts
that kicked in at the start of the year would fire up economic activity.
As the figure came in as expected, Wall Street barely moved. The Dow was
up less than 0.1 percent in late morning trading, with disappointing earnings
dampening sentiment. The S&P 500 and Nasdaq Composite were both in the red.
“A four-year high GDP reading from the US meant little to the markets on
Friday, the number — much-heralded by Donald Trump — failing to
significantly move the needle as the week wrapped up,” said Spreadex analyst
Connor Campbell.
“Perhaps investors doubt the sustainability of such a performance,
alongside the fact that there are still 2 more readings to come, with those
revisions having a tendency to be fairly chunky,” he added.
– ‘Come off the boil’ –
While the strong growth rate was welcome, analysts said investors have
plenty to worry about going forward.
“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 none the less impressive and that the strong
labour market together with still accommodative fiscal and monetary policies
mean that the US was likely to remain at the top of the growth pack among
advanced nations.
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EUROPE-STOCKS-MARKETS 2 LAST LONDON
– Twitter’s wings clipped –
Wall Street’s internet frenzy continued on Friday.
Twitter shares plunged over 18 percent after the social network warned it
could potentially lose millions of users as it cleans up the platform.
The slump came despite a record profit for Twitter in a quarterly report
which also said the number of users could fall as part of the effort to weed
out abusive and fake accounts.
“Twitter has provided yet another knockback for the tech-focused Nasdaq
index, with the social media platform following Facebook lower,” said market
analyst Joshua Mahoney at IG.
The Nasdaq was down 0.7 percent in late morning trading in New York.
Facebook on Thursday warned of weaker growth, sending its shares falling
nearly 20 percent and wiping out some $100 billion in market value.
Investors have been concerned about the financial impact of greater EU
privacy protections, which many major internet firms are applying to all
their users, as well as greater public concern about misuse of their data.
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.
BSS/AFP/HR/0945