The U.S. dollar rose and stocks on Wall Street lifted a gauge of global equities on Wednesday on robust U.S. housing data and the notion a strong economy would overcome any investor skittishness over a possible impeachment of President Donald Trump.
European shares cut losses and U.S. stock indexes turned higher early in the session after Trump said a trade deal with China could happen sooner than expected.
Trump made the remarks to reporters a day after delivering a stinging rebuke to China’s trade practices at the United Nations General Assembly, saying he would not accept a “bad deal.”
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Stocks in Europe were pressured by political uncertainty after Democrats in the U.S. House of Representatives moved to launch a formal impeachment inquiry of Trump.
But Wall Street shrugged off an impeachment investigation, with the benchmark S&P 500 posting its biggest daily gain in two weeks. Yields on U.S. Treasury long-dated debt rose after falling for seven straight sessions.
The White House released a summary of a telephone call between Trump and Ukraine’s president, who said he was not pushed to investigate former Vice President Joe Biden, the front-runner for the 2020 Democratic presidential nomination.
“As long as the economy remains firm, we don’t think the drama out of Washington will impact the staying power of this bull market,” said Ryan Detrick, senior market strategist at LPL Financial.
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MSCI’s gauge of stocks across the globe rose 0.01 per cent. The pan-European STOXX 600 index closed down 0.58 per cent while in London, the FTSE 100 index fell 0.02 per cent.
Canada’s main stock index dropped for the third straight session on Wednesday, hurt by declines in energy and materials stocks.
The Toronto Stock Exchange’s S&P/TSX Composite index was unofficially down 14.04 points, or 0.08 per cent, at 16,784.29.
The energy sector dropped 0.4 per cent after oil prices fell on worries that fuel demand could fall after U.S. President Donald Trump doused recent optimism over Beijing-Washington trade talks at a time of rising U.S. crude oil stockpiles.
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The materials sector lost 2.2 per cent as gold prices fell. Kinross Gold Corp. and First Majestic Silver Corp. were both down 5.1 per cent.
Also hurting the main index was a 4.2-per-cent drop in shares of BlackBerry after multiple analysts cut price targets on the company after it missed quarterly revenue estimates and lowered the top end of its full-year forecast on Tuesday.
Michael Antonelli, market strategist at Robert W. Baird in Milwaukee, said good economic data is fighting with political noise and good data is winning.
Sales of new U.S. single-family homes rebounded more than expected in August, the latest sign that lower mortgage rates were starting to boost the struggling housing market.
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“The impeachment is not a big issue until you get into a recession. It’s a big deal politically, but it’s not a big deal economically,” said Stan Shipley, fixed income strategist, at Evercore ISI in New York.
The Dow Jones Industrial Average rose 162.94 points, or 0.61 per cent, to 26,970.71. The S&P 500 gained 18.25 points, or 0.62 per cent, to 2,984.85 and the Nasdaq Composite added 83.76 points, or 1.05 per cent, to 8,077.38.
The dollar benefited from a sharp pullback for the pound amid worries about nagging Brexit- and election-related risks.
The dollar index rose 0.71 per cent, with the euro down 0.69 per cent to $1.0942. The Japanese yen weakened 0.67 per cent versus the greenback at 107.81 per dollar.
Most yields on 10-year euro zone bonds yields rose in late trade following Trump’s comment U.S.-China trade.
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Germany’s 10-year Bund yield rose 2 bps at -0.58 per cent .
Yields on U.S. 10-year Treasury notes rose 27/32 in price to yield 1.7302 per cent.
Oil prices fell for a second day as U.S. crude inventories unexpectedly surged 2.4 million barrels in the week to Sept. 20, according to the Energy Information Administration, instead of declining 249,000 barrels as analysts expected.
Crude prices fell after Trump said on Tuesday he saw a path to peace with Iran, easing supply fears after the Sept. 14 attack on Saudi Arabia’s oil facilities that halved its output. The kingdom and the United States have blamed Iran for the attack.
Brent crude futures settled down 71 cents at $62.39 a barrel. U.S. West Texas Intermediate crude fell 80 cents to settle at $56.49 a barrel.
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U.S. gold futures settled down 1.8 per cent at $1,512.3 an ounce.
Reuters