· Wall Street ended mixed on Thursday, with a gain in Microsoft offsetting a dip in Apple, a day after the Federal Reserve cut interest rates as expected and left the door open for further monetary easing.
The Dow Jones Industrial Average .DJI declined 0.19% to end at 27,094.79 points, while the Nasdaq Composite .IXIC crept up 0.07% to 8,182.88. The S&P 500 .SPX stood at 3,006.79 points, up less than one point from Wednesday
With the S&P 500 up nearly 20% in 2019, the benchmark index is trading at about 17 times expected earnings, up from about 15 at the end of last year, according to Refinitiv’s Datastream.
· Expectations of another rate cut by the Fed, following the U.S. central bank’s 25-basis-point reduction on Wednesday, also drove sentiment. The Fed, in announcing its second quarter-percentage-point cut this year, said future reductions would be “largely data-dependent.”
Traders see a nearly 50% chance for another 25 basis point rate cut in October, according to CME Group’s FedWatch tool.
“The market just continues to believe the Fed is going to be accommodative,” said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC in New York.
The Fed injected another $75 billion into the U.S. banking system on Wednesday, restoring a measure of order after the central bank’s benchmark interest rate rose above its targeted range for the first time since the financial crisis.
· Stocks in Asia Pacific edged up in Friday morning trade as a series of developments overnight on the U.S.-China trade front dampened hopes.
The Nikkei 225 in Japan rose 0.23% in early trade, with shares of index heavyweight and conglomerate Softbank Group jumping 1.32%. The Topix index also gained 0.18%.
Investors will watch for developments on the U.S.-China trade front following overnight developments. The South China Morning Post reported Thursday that known China hawk and Trump advisor Michael Pillsbury warned the U.S. is ready to escalate the trade war if a deal isn’t struck soon, citing an interview in Hong Kong.
Reference: CNBC, Reuters
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