China data, JPMorgan earnings boost stocks, riskier assets

Global stock markets rose on Friday after JP Morgan›s results kicked off the US corporate earnings season in style, while signs of stabilisation in China›s economy also helped riskier assets on views the growth outlook worldwide is better than thought.

JPMorgan Chase & Co posted a better-than-expected quarterly profit on Friday, easing fears that slowing economic growth could weigh on its results.

The largest US bank by assets showed strength across its businesses in the first quarter, driven by what Chief Executive Jamie Dimon described as solid growth in the US economy, moderate inflation and strong consumer and business confidence.

Loans in JPMorgan›s consumer banking division rose 4 percent from a year ago. Overall revenue rose 4.7 percent to $29.85 billion. Analysts had expected revenue of $28.44 billion, according to IBES data from Refinitiv.

«We›ve been generally quite optimistic about the outlook for the economy,» Chief Financial Officer Marianne Lake told reporters on a call to discuss the results. «It doesn›t diminish the fact that there are a number of risks out there. Right now we don›t see that playing out in the data.»

Chinese data showed exports rebounded last month, driving US and eurozone bond yields to three-week highs and helping offset weaker imports and reports of another cut in German growth forecasts.

Investors are looking for signs of a Chinese economic recovery to temper global growth worries, especially after the International Monetary Fund this week downgraded its 2019 world economic outlook for the third time.

China›s trade results, as well as credit data, have helped boost risk appetite and reinforce the stabilization thesis, which should have spill-over effects for the global economy, said Candice Bangsund, a portfolio manager with the global asset allocation team at Fiera Capital in Montreal.

«The whole China situation really appears to be gaining some ground,» Bangsund said. «We saw a very impressive rebound in exports, this of course is helping alleviate fears of a hard landing.» MSCI›s gauge of equity market performance in 47 countries gained 0.37%, while the EURO STOXX 50 index rose 0.31%.

On Wall Street, the Dow Jones Industrial Average rose 186.88 points, or 0.71%, to 26,329.93. The S&P 500 gained 12.47 points, or 0.43%, to 2,900.79 and the Nasdaq Composite added 19.07 points, or 0.24%, to 7,966.43 The euro gained despite the German growth concerns. Dealers were gearing up for demand from Japan as Mitsubishi UFJ Financial closed in on its multi-billion-euro acquisition of DZ Bank›s aviation-finance business.

The dollar slipped on Friday to its lowest against the euro in more than two weeks on reports a foreign bank was preparing to fund an acquisition of a European company, while signs of economic stabilization in China and a strong start to US corporate earnings season boosted demand for riskier assets.

The euro was 0.6% higher against the dollar at $1.1317, its highest since March 26. Dealers attributed part of the euro›s strength to anticipated currency demand arising from a Japanese bank›s plans to purchase a German multibillion-dollar aviation finance business.

Speculators were buying the euro in response to reports on Mitsubishi UFJ Financial Group›s planned purchase of the aviation financing business of Germany›s DZ Bank, dealers said. The transaction was announced on March 1 and MUFG said the it was expected to close after June.

Investors› appetite for riskier currencies got a boost after Chinese data showed exports rebounded last month, helping offset weaker imports, and reports of another reduction in Germany›s growth forecasts, analysts said.

Data from Europe was encouraging. Euro zone industrial output declined by less than expected in February.

Against the Japanese yen, which tends to benefit during geopolitical or financial stress as Japan is the world’s biggest creditor nation, the dollar rose 0.18%.

The Australian dollar, which is sensitive to shifts in risk sentiment, jumped 0.88%.

Yields on Germany›s 10-year government bond crossed into positive territory, to 0.054%.

Benchmark 10-year US Treasury notes fell 13/32 in price to push up their yield to 2.5507%.

Oil provided the big milestones. Brent was at $71.4 a barrel, having broken back through the $70 threshold this week, and US WTI was heading for a sixth straight week of gains for the first time since early 2016.

Involuntary supply cuts in Venezuela, Libya and Iran have supported perceptions of a tightening market, already constrained by production cuts from Opec and its allies.

Brent crude oil futures rose 64 cents to $71.47 a barrel while West Texas Intermediate crude futures, the US benchmark, added 64 to $64.22.

Commodities have had the best first-quarter start ever, Bank of America Merrill Lynch analysts said, calling the annualized returns they are tracking the strongest in the past 100 years.

Taking advantage of strong prices and subdued valuations for oil producers, Chevron said it will buy Anadarko Petroleum Corp for $33 billion in cash and stock.

Agencies