The shock announcement that Boeing ousted its embattled CEO invigorated Wall Street, while trading was muted on European and Asian stock markets as many investors were already away for Christmas.
Boeing said the leadership change was needed to “restore confidence” and “repair relationships with regulators, customers and all other stakeholders” and the news sent the Dow member’s share price jumping 2.5%.
Still, at around $336, the share is considerably off from the $446 it struck earlier this year as the aircraft manufacturer has been unable to deliver a quick fix to the problem seen behind the crash of two 737 MAX airliners.
Dennis Muilenburg was replaced by board Chairman David Calhoun because the grounding of the MAX has dragged on far longer than initially expected as more disturbing details have dribbled out about its certification.
“The industrial giant is trying to put the 737 MAX catastrophes behind it, and the removal of Muilenburg is a part of that strategy, but the group will find it tough to shake off the reputation of the two disasters,” said market analyst David Madden at CMC Markets UK.
Meanwhile, more positive news on the US-China trade front also boosted sentiment.
Beijing said it will lower import tariffs on more than 850 products including frozen meat from next month.
And while the move does not appear to be linked to the bruising trade war between China and the US, which has seen Washington and Beijing exchanging levies on goods worth hundreds of billions of dollars, it will likely help reduce tensions.
“The news that Beijing will reduce their levies on more than 850 US imports next month has lifted the mood on Wall Street,” said Madden.
In Europe trading was muted, which many investors taking a break for the holidays.
In Europe, London’s FTSE 100 gained 0.5% to 7,623.59 points while Frankfurt’s DAX 30 was down 0.1% at 13,300.98 and Paris’s CAC 40 was up 0.1% to 6,029.37 points at the close yesterday.
“It’s been a strong run up to Christmas for the stock markets and it seems traders are taking a little breather in this shortened trading week,” said analyst Craig Erlam at trading firm Oanda.
“It’s been a good few weeks for investors, spurred primarily by the de-escalation in the trade war, with Trump... claiming it will be signed very shortly.”
Global equities have enjoyed a flourish as they head towards the end of the year, having been on a roller-coaster ride for 12 months owing to the long-running trade row and Brexit.
And observers say that with those two major issues cleared up for now, 2020 could see a healthy run-up in prices, boosted by looser central bank monetary policy and signs of improvement in economies around the world.
With very little by way of market-moving events on the horizon, analysts are expecting a quiet week.
Meanwhile, the dollar held near a two-week high against a basket of currencies yesterday as the North American trading session kicked off for the holiday-shortened week, while sterling fell on concerns over the British government’s hard line on Brexit talks.
The dollar index, which measures the greenback against six major currencies, was up 0.02% at 97.71. The index rose 0.3% on Friday after the release of upbeat US economic data late last week.
The dollar, up 1.6% for the year as measured by the dollar index, has broadly benefited during bouts of risk aversion – because it is considered a safe-haven currency – and when markets have rallied, because the US economy is outperforming other parts of the world.
“The USD’s bounce last week sets it up for a modest “Santa rally” perhaps but we rather view scope for gains as limited in the medium to longer run still,” Shaun Osborne, chief FX strategist at Scotiabank, said in a note.
The dollar has also been supported since Washington and Beijing came to an interim trade agreement earlier this month. China said on Monday it would lower tariffs on some products next year.
Currencies linked closely to the prospects for global trade rose yesterday, with the Aussie up 0.16% and the kiwi up 0.12%.
With the economic calendar light before the holidays, analysts doubt major currencies will post significant moves this week, analysts said.
The future path of the dollar is likely linked to what kind of benefits non-US currencies reap from the recent easing in trade-related tensions between the United States and China.
“With the Fed likely on hold next year, the key to a weaker dollar in 2020 could depend on further momentum from Europe,” said Edward Moya, senior market analyst at OANDA.
“Europe is likely to benefit the most from continued progress with the US-China trade war and if we see any hints of a manufacturing rebound the euro could eye the 1.15 level,” Moya said.
Yesterday, the euro was 0.06% higher at $1.1085.
The Canadian dollar was trading 0.16% lower against the greenback at 1.3173 to the greenback, or 75.89 US cents, after disappointing data.
from Gulf Times https://ift.tt/2MnksKh
Comments
Post a Comment