China data, JPMorgan results lift stocks, riskier assets

JPMorgan's shares rose 4.69 per cent and led a broad rally in bank stocks, with the KBW banking index gaining 1.94 per cent. — Reuters pic
JPMorgan's shares rose 4.69 per cent and led a broad rally in bank stocks, with the KBW banking index gaining 1.94 per cent. — Reuters pic

NEW YORK, April 13 ― Global stocks rose on Friday after JP Morgan's results kicked off the US corporate earnings season in style, while signs of stabilisation in China's economy helped riskier assets amid talk that the growth outlook worldwide is better than thought.

Chinese data showed exports rebounded in March, lifting US and euro zone bond yields to three-week highs and helping offset weaker imports and reports of another cut to German growth forecasts.

Investors are looking for signs of a Chinese economic recovery to temper global growth worries, especially after the International Monetary Fund this week downgraded its 2019 world economic outlook for the third time.

China's trade results, as well as credit data, have helped boost risk appetite and reinforce the stabilisation thesis, which should have spill-over effects for the global economy, said Candice Bangsund, a portfolio manager with the global asset allocation team at Fiera Capital in Montreal.

“The whole China situation really appears to be gaining some ground,” Bangsund said. “We saw a very impressive rebound in exports; this of course is helping alleviate fears of a hard landing.”

US stocks rallied on JPMorgan and an 11.5 per cent jump in Walt Disney Co shares, which lifted the Dow Industrials by 1 per cent and helped the S&P 500 total return index post a record close.

MSCI's gauge of equity market performance in 47 countries gained 0.46 per cent, while the EURO STOXX 50 index rose 0.36 per cent.

JPMorgan's quarterly earnings easily beat analyst estimates, easing fears that slowing economic growth could weigh on results. JPMorgan's shares rose 4.69 per cent and led a broad rally in bank stocks, with the KBW banking index gaining 1.94 per cent.

Regional lenders in Europe, including StanChart, Deutsche Bank, BNP Paribas and Credit Suisse, also rallied on JPM's results, taking the European bank index up 1.9 per cent to a five-month high.

On Wall Street, the Dow Jones Industrial Average rose 269.25 points, or 1.03 per cent, to 26,412.3. The S&P 500 gained 19.09 points, or 0.66%, to 2,907.41, and the Nasdaq Composite added 36.81 points, or 0.46 per cent, to 7,984.16.

The euro gained despite the German growth concerns. Dealers were gearing up for demand from Japan as Mitsubishi UFJ Financial closed in on its multi-billion-euro acquisition of DZ Bank's aviation-finance business.

The dollar index fell 0.21 per cent, with the euro up 0.38 per cent to US$1.1293 (RM4.6462). The Japanese yen weakened 0.30 per cent versus the greenback at 112.02 per dollar.

Euro zone and US government debt yields rose after the rebound in Chinese exports. Yields on Germany's 10-year government bond crossed into positive territory, to 0.058 per cent.

Benchmark 10-year US Treasury notes fell 16/32 in price to push up their yield to 2.5615 per cent.

Crude oil’s big 2019 start

Oil provided big milestones, with Brent breaking through the US$70 threshold this week and the US benchmark posting six straight weeks of gains for the first time since early 2016.

Involuntary supply cuts in Venezuela, Libya and Iran have supported perceptions of a tightening market, already constrained by production cuts from the Organization of the Petroleum Exporting Countries and its allies.

Brent crude oil futures settled up 72 cents at US$71.55 a barrel, while West Texas Intermediate crude futures , the US benchmark, rose 31 cents to settle at US$63.89.

Commodities have had the best first-quarter start ever, Bank of America Merrill Lynch analysts said, calling the annualised returns they are tracking the strongest in the past 100 years.

Taking advantage of strong prices and subdued valuations for oil producers, Chevron said it will buy Anadarko Petroleum Corp for US$33 billion in cash and stock.

Gold steadied after posting its biggest daily decline in two weeks on Thursday when it broke below the key psychological level of US$1,300 an ounce, as the impact of a weak dollar was offset by gains on Wall Street.

US gold futures settled 0.1 per cent higher at US$1,295.2. ― Reuters

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