The Thursday Market Minute
- Global stocks grind higher after ECB meeting in Frankfurt as investors saw dovish signals on growth and inflation from outgoing President Mario Draghi
- UK pound rallies as Prime Minister Theresa May survives leadership challenge and heads to Brussels on a last-ditch effort to extract support from EU leaders for her Brexit deal.
- Global oil prices slip below $60 a barrel as record U.S. production and weakening global demand keep pressure on crude despite planned OPEC cuts.
- U.S. equity futures gain, with the Dow called 65 lower and the Nasdaq poised for a modest upside start, with GE shares surging on a rare upgrade from JPMorgan's Stephen Tusa.
Global stocks edged higher Thursday, pulling U.S. equity futures into the green, as investors reacted to a key meeting of the European Central Bank that marked the end of its controversial bond buying program and kept a close on developments in trade talks between Washington and Beijing.
The ECB said its Asset Purchase Program, which has scooped up more than €2.6 trillion in government, agency and corporate bonds over its near four-year lifespan, would end on December 31. The bank also made no changes to its key interest rates, including the -40 basis point charge it applies to cash left in its overnight deposit facility, and said rates would remain "at their present levels at least through the summer of 2019."
Draghi: We think we have instruments to address contingencies in this climate of great uncertainty, the monetary policy formulation wants to keep optionality as a dominant feature— European Central Bank (@ecb) December 13, 2018
The dovish tone of the decision, which was accompanied by downgrades for near-term growth and inflation, pulled the euro to 1.1346 and helped European stocks grind higher in early afternoon trading.
The Stoxx Europe 600, the region's broadest benchmark, was quoted 0.05% higher by mid-afternoon in Frankfurt following the ECB meeting, led to the upside by utilities, basic materials and cyclical stocks.
U.S. equity futures suggest a firmer start to the trading day on Wall Street, with contracts tied to the Dow Jones Industrial Average
General Electric (GE) shares were an early mover in the premarket session, rising 12.7% to indicate an opening bell price of $7.59 each after JPMorgan analyst Stepehen Tusa lifted his rating on the stock to "neutral" from "underweight" -- his first change on the company since May of 2016 -- as he argued the ""known unknowns"" surrounding the troubled group are now better understood.
In Europe, the pound rallied following last night's win for U.K. Prime Minister Theresa May in a leadership challenge that cements her position as head of government as she heads to a European leaders' summit seeking further assurances on her Brexit deal in order to sway recalcitrant lawmakers in London.
The pound, which had fallen past a 20-month low to trade at 1.2484 yesterday, rallied more than 1.4% following May's survival and was marked at 1.2668 by mid-day Thursday in London.
Britain's FTSE 100 was marked 0.21% lower as the pound climbed, while Germany's DAX index traded modestly in the green thanks to solid gains for luxury carmakers BMW and Daimler.
Away from equities, the U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.15% higher at $97.19 while benchmark 10-year note yields eased to $2.893% following yesterday's $24 auction of existing bonds yesterday.
Global oil prices were weaker at the start of trading in New York, with crude slipping below $60 a barrel after yesterday's smaller-than-expected drawdown in U.S. stockpiles of just 1.2 million barrels -- far less than the $10.18 million reported Tuesday by the American Petroleum Institute -- and record American production of 11.7 million barrels per day, according to the Energy Information Administration.
Brent crude contracts for February delivery, the global benchmark, were marked 43 cents lower from their Wednesday close in New York and changing hands at $59.72 per barrel while WTI contracts for January delivery, which are more tightly liked to U.S gas prices, were 51 cents lower at $50.64 per barrel.