European Shares Rise Before Fed Decision

Paterniano Del Favero
Luglio 27, 2017

All three major United States stock indexes hit record highs in early NY trading as Boeing and AT&T led another set of strong earnings reports from U.S. companies.

Boeing rose 6.5 per cent after reporting a quarterly profit, compared with a loss a year earlier, and the planemaker raised its full-year core profit forecast.

European stocks are set to open mixed Wednesday as investors await the first estimate of second quarter growth in the United Kingdom and what could be a key statement on balance sheet reduction from the U.S. Federal Reserve.

The latter numbers helped the dollar recover some ground in USA and Asian trading on Wednesday, with traders citing a trimming of positions ahead of the Fed meeting, not due until late in the US session.

Markets instead will be watching for any signals about another possible rise in the benchmark lending rate in 2017, and on when the Fed will begin winding down its multi-trillion-dollar investment holdings - something that could have a similar effect as a rate hike. "Oil is up. The dollar hit the bottom of its two-year range so it looked like it was due for a bounce".

The S&P and the Nasdaq closed at record highs on Tuesday, while the Dow hovered around record levels, helped by well-received reports from big names, including McDonald's and Caterpillar.

Among top fallers on the day, shares in chipmaker ASM International fell 6.1 percent in early deals after it reported record order intake for the second quarter.

Oil prices rose to near eight-week highs, with Brent futures trading over $50 a barrel after data showing a fall in United States inventories. The U.K. economy grew 0.3 percent during the second quarter, up from 0.2 percent in the first three months of the year.

Five years after European Central Bank chief Mario Draghi's "whatever it takes to preserve the euro" speech which set the foundations for strong gains in the currency, the euro was again front and centre of investors' minds as recent strength weighed on earnings growth expectations for Euro zone corporates, particularly those most dependent on exports, such as industrials firms.

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