· Stocks rose on Thursday, erasing most of the steep losses from earlier in the week, as global bond yields rebounded while investors digested better-than-expected trade data out of China.
The Dow Jones Industrial Average closed 371.12 points higher, or 1.4% to 26,378.19. The S&P 500 advanced 1.9% to 2,938.09 while the Nasdaq Composite surged 2.2% to 8,039.16.
Thursday’s gains helped the indexes recover most of the sharp losses from Monday’s session. The Dow and S&P 500 fell nearly 3% each on Monday while the Nasdaq dropped 3.5%. The indexes hit the week’s lows on Wednesday before staging a strong comeback.
Through Thursday’s close, the S&P 500 and Nasdaq were up 0.2% and 0.4%, respectively, for the week. The Dow was only down 0.4%.
“This is pretty normal after market shocks,” said Keith Lerner, chief market strategist at SunTrust Private Wealth. “Normally, you have a sharp move down, catching people offsides. Then you get stretched to one side and there is this battle between fear and greed. You get some people thinking this is ‘the big one’ and they start selling. But then you get people coming in wanting to buy.”
· Marko Kolanovic, J.P. Morgan’s quant guru, and Dubravko Lakos-Bujas, the bank’s chief U.S. equity strategist, are encouraging investors to seize the buying opportunity after the trade-war induced sell-off.
“We do think that after a short period of stabilization, markets will likely regain previous highs, and hence we see this sell-off as a medium-term buying opportunity,” they say.
From wage growth to better-than-expected earnings to global central banks’ support, the stage is set for the market to go higher from a fundamental standpoint, according to J.P. Morgan strategists.
“With central banks globally in easing mode, cash is becoming less rewarding leaving equities as potentially the only alternative with an attractive yield and long-term growth potential,” Kolanovic and Lakos-Bujas said
· European stocks closed higher on Thursday amid stabilizing bond yields and better than expected Chinese export data.
The pan-European Stoxx 600 was up 1.4% at the closing bell, with China-exposed basic resources stocks leading the gains with a 2.3% climb.
The Stoxx 600 gain marked the best days of gains in almost 2 months.
China said on Thursday that its dollar-denominated exports had risen 3.3% from a year ago, despite U.S. President Donald Trump threatening new tariffs on Chinese goods last week.
· Stocks in Asia Pacific traded higher Friday morning, as investors waited for the release of Chinese inflation data. Meanwhile, Japan’s economy grew more than expected in the period from April to June.
In Japan, the Nikkei 225 gained 0.87% in early trade, as shares of index heavyweight and conglomerate Softbank Group added 1.15%. The Topix index also rose 0.79%.
Over in South Korea, the Kospi advanced 0.87% as industry heavyweight Samsung Electronics’ stock gained 1.17%. Australia’s S&P/ASX 200 also rose 0.28%.
Markets in Singapore and Taiwan are closed on Friday.
Reference: CNBC, Reuters
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