World stocks edged up slightly on Friday with Wall Street and European indexes rallying through the day, but overall major markets ended lower for the third straight week as US trade policy took its toll on investor and business confidence.
In the US, Nike shares ended the day up 11.1 per cent to $US79.68, the biggest one-day gain in nearly four years for the sportswear maker, after a strong earnings report. Nike was the biggest boost to the Dow Jones Industrial Average and the benchmark S&P 500 index.
The Dow Jones Industrial Average rose 59.29 points, or 0.2 per cent, to 24,275.34, the S&P 500 gained 2.3 points, or 0.1 per cent, to 2718.63 and the Nasdaq Composite added 6.6 points, or 0.1 per cent, to 7510.30.
MSCI’s gauge of stocks in major world markets gained 0.7 per cent on Friday but ended down 1.3 per cent for the week and 0.7 per cent for June.
ASX futures were 23 points higher at 6171. The Australian dollar rebounded 0.7 per cent to US74.05¢.
Canada struck back at the Trump administration over US steel and aluminium tariffs on Friday, vowing to impose punitive measures on $C16.6 billion worth of American goods until Washington relents.
The retaliation came as General Motors warned any US tariffs on imported vehicles could cost jobs and US Treasury Secretary Steve Mnuchin denied a report that President Donald Trump wanted to withdraw from the World Trade Organisation.
“The markets are very much subject to headlines on trade and tariffs,” said Peter Cecchini, chief market strategist at Cantor Fitzgerald in New York.
“They are important from the standpoint that trade globalisation has been the cornerstone for growth and when you do something to sort of undermine that cornerstone, that’s a reasonable reason for concern.”
The US administration is due to impose tariffs on Chinese goods worth $US34 billion beginning July 6, likely prompting a tit-for-tat response from Beijing.
In Europe a deal struck by EU leaders on immigration helped sentiment and triggered a jump in the euro.
The pan-European STOXX 600 was up 0.8 per cent at its close, while Germany’s trade-sensitive DAX jumped 1.1 per cent.
While Asian stocks also rose, the Chinese yuan suffered its worst month on record, losing 3.0 per cent against the US dollar in June as investors pulled money from a market likely to suffer from higher barriers to trade.
The US dollar slipped to a three-day low against the euro after European Union leaders reached an agreement on migration that eased pressure on German Chancellor Angela Merkel, but the greenback remained on track to log its best quarterly performance in six quarters.
The yield curve between two-year and 10-year US notes flattened to 30 basis points, the flattest since 2007, after US consumer spending data disappointed some analysts’ expectations. Some investors see its flattening as a sign recession may be around the corner.
The next major US economic release will be next week’s employment report for June, which will be scoured for any indications of rising wage pressures.
Oil prices extended gains to fresh highs on a tighter market as US sanctions against Iran threatened to remove a substantial volume of crude oil from world markets amid rising demand.
US crude futures settled up 0.95 per cent at $US74.15 per barrel. Brent was last at $US79.44, up 2.04 per cent on the day.
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