Overview

US stocks followed global equities higher, while Treasuries sold off, as stronger-looking economic data in China and Germany helped assuage the worst of fears about a global slowdown.

The S&P 500 tacked on 0.7 per cent, buoyed by the healthcare and energy sectors, to register its highest close since November 8. Consumer staples, real estate and materials were the lone sectors in the red. For the week, it is up 0.4 per cent.

The Dow Jones Industrial Average rose 0.4 per cent, and the tech-heavy Nasdaq Composite advanced 0.8 per cent.

With Friday’s gains, the S&P snapped a three-session losing streak — its longest of 2019 — that trimmed its February gain to 3 per cent. However, the benchmark index was up 11 per cent over the first two months of the year, its best annual start since 1991, amid growing hopes for a US-China trade deal and reduced expectations for interest rate rises by the Federal Reserve.

US data on Friday showed personal spending in December fell more than expected. The core personal consumption expenditure index, the Fed’s preferred inflation gauge, remained level at 1.9 per cent growth year-over-year and below the central bank’s 2 per cent target.

US government bonds were lower, with the yield on the 10-year Treasury note climbing 5.5 basis points to 2.7658 per cent.

The DXY dollar index, which measures the greenback against a weighted basket of currencies, was up 0.3 per cent.

Other haven assets, including gold, faded. The precious metal was down 1.6 per cent.

Stronger appetite for risk came after German retail sales for January rebounded more strongly than expected and the Caixin-Markit China manufacturing purchasing mangers index for February picked up from its January low. Optimism over trade also supported investor sentiment. The US and China had faced a March 1 deadline, but President Donald Trump agreed to delay planned tariff increases, citing progress in the talks.

In the UK, however, a key survey showed manufacturers’ outlook has taken a severe blow from Brexit uncertainty.

The Europe-wide Stoxx 600 was up 0.4 per cent, taking its advance for 2019 to 10.8 per cent.

China’s CSI 300 index rose 2.2 per cent after index provider MSCI lifted the Chinese weighting in its influential emerging markets index, a major step to integrate the country’s domestic stock markets with international capital. MSCI lifted the inclusion factor for the country’s so-called “A-shares” to 20 per cent.

Snapshot

Level+/- %
Dollar index96.463+0.3
Dollar per euro$1.1364-0.1
Dollar per pound$1.3209-0.4
Brent crude$65.07-1.9
FTSE 1007,106.73+0.5
S&P 5002,803.69+0.7

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Markets Briefing is a concise look at global markets, updated throughout the trading day by Financial Times journalists in Hong Kong, New York and London. Feedback? Write in the comments below or send us an email.

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