Global Stocks Climb as U.S. Data Boosts Optimism
The global equity markets maintained their upward trend on Friday because of positive U.S. economic indicators and successful corporate earnings despite upcoming Japanese upper house election uncertainties.
The S&P 500 and Nasdaq achieved record highs on Thursday because U.S. retail sales exceeded forecasts and jobless claims decreased which indicated strong consumer demand. The Asian and European trading sessions maintained the positive momentum from the previous day as the MSCI Asia-Pacific ex-Japan index increased 0.9% and the pan-European STOXX 600 rose 0.4%.
The positive earnings performance of Netflix together with its better-than-expected results contributed to market optimism. Arbuthnot Latham’s Eren Osman stated that the company maintains a positive view of U.S. macroeconomic conditions. The growth rate will decrease but we do not foresee any significant deterioration.
The market will focus on earnings reports from Alphabet and Tesla during the upcoming week to determine corporate performance.
The yen maintained its stability at 148.65 per dollar but showed signs of a second consecutive weekly decline. Market participants remain cautious about the upcoming Japanese election because polls indicate the Prime Minister Shigeru Ishiba's coalition might lose its control of the upper house.
The Bank of Japan's 2% target remained intact as Japan's core inflation decreased in June because of short-term energy bill subsidies. The yen faces potential further depreciation because of potential political instability that could result from Ishiba's resignation according to analysts.
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