While you were sleeping: Yellen doubts Trump target

Friday 14th July 2017

Wall Street moved higher as investors positioned themselves for a fresh round of quarterly corporate earnings.

On Friday, JPMorgan Chase, Wells Fargo and Citigroup are among US companies set to report their latest quarterly results.

Second-quarter earnings are expected to rise 7.8 percent from a year ago, after first-quarter earnings posted their best performance since 2011, according to Reuters.

Meanwhile, US Federal Reserve Chair Janet Yellen, testifying before the Senate Banking Committee on Thursday, warned that achieving a 3 percent annual growth rate for the US economy over the next few years—a goal set by President Donald Trump—would be “quite challenging.”

“It’s something that would be wonderful if you can accomplish it—I’d love to see it,” Yellen said in response to a question, according to Bloomberg. “It would be quite challenging.”

In the latest economic data, a Labour Department report showed producer prices posted a surprise gain in June, rising 0.1 percent from the previous month.

A separate Labour Department report showed that initial claims for state unemployment benefits fell 3,000 to a seasonally adjusted 247,000 for the week ended July 8.

"It remains hard for companies to hire skilled workers. Inflation isn't slip-sliding away from the Fed's goal," Chris Rupkey, chief economist at MUFG in New York, told Reuters. "We expect they are on track to announce the start of the balance sheet unwind in September and go for the last of three rate hikes planned for this year in December."

In 3.08pm trading in New York, the Dow Jones Industrial Average rose 0.1 percent, while the Nasdaq Composite Index gained 0.2 percent. In 2.53pm trading, the Standard & Poor’s 500 Index increased 0.2 percent.

US Treasuries declined, pushing yields on the 10-year note three basis points higher to 2.35 percent.

The Dow rose as gains in shares of Wal-Mart Stores and those of Apple, recently up 1.5 percent and 1.4 percent respectively, outweighed declines in shares of McDonald’s and those of DuPont, recently 0.9 percent and 0.8 percent weaker respectively.

Shares of Target climbed, up 4.4 percent as of 3.22pm in New York, after the retailer upgraded its second-quarter sales outlook.

“As a result of improved traffic and sales trends through the first two months of the quarter, Target is now expecting to report a modest increase in its second quarter comparable sales,” the company said in a statement.

In Europe, the Stoxx 600 Index finished the session with a 0.3 percent advance from the previous close. Germany’s DAX Index rose 0.1 percent, and France’s CAC40 Index climbed 0.3 percent.

The UK’s FTSE 100 Index slipped 0.1 percent, with shares of AstraZeneca posting the largest percentage decline at 3.5 percent.

(BusinessDesk)

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