Global Stocks on Pins and Needles Ahead of May Jobs Data
Frankfurt (June 1) Global stocks rebounded Friday as investors both gauged reaction to the escalating trade war that followed President Donald Trump's decision impose steep tariffs on steel and aluminium imports and prepped for a key reading on job creation later today from the world's biggest economy.
Reaction from some of America's key trade allies has some investors concerned that a tit-for-tat trade war could slow global growth while igniting fresh inflation concerns was, however, partially offset by cooling political tensions in Italy, where a new coalition government is expected to be sworn in in Rome Friday after leaders from the Five Star and Lega parties nominated a more mainstream candidate for the post of finance minister.
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The news helped take European stocks firmly higher at the start of trading, with the DAX performance index in Germany rising 0.87% and Britain's FTSE 100 rising 0.67% in the opening 90 minutes of trading. Italy's FTSE MIB benchmark surged 2.7%, on news of the new government, with bank stocks leading the advance as 2-year government bond yields eased to 0.68% and 10-year yields retreated to 2.64%.
Spain's IBEX index was marked 1.6% higher even as Socialist party leader Pedro Sanchez assumed the role of Prime Minister after ousting center-right pro-European leader Mariano Rajoy in a no confidence vote following a corruption scandal.
However, with only 84 seats in the 350-seat chamber, Sanchez will need the support of, among others, the Basque Nationalist Party in order to maintain its leadership until the end of the current parliamentary term in 2020.
Deutsche Bank (DB) shares rallied from an all-time low in early Friday trading as new CEO Christian Sewing attempted to draw a line under the lender's escalating challenges that could put its mutli-billion dollar restructuring under threat and won the support of a key shareholder.
Deutsche Bank shares were marked 3.2% higher by mid-day in Frankfurt and changing hands at €9.45 following yesterday's 7% decline that pushed the stock to an all-time low of €9.16 each. Friday's move puts the stock's year-to-date decline just under 40% compared to the 10.6% decline for the Stoxx Europe 600 Banks index.
Global market sentiment, however, remains broadly cautious given both the Trump Administration's somewhat bellicose approach to world trade and the swift response from allies in Europe and North America, all of which imposed or prepped retaliatory tariffs following the dropping of exemptions on import levies yesterday.
TheStreet
