World stocks rose for a second consecutive week on Friday as investors prepared for an expected run of strong earnings in the United States, although fears about the U.S.-China trade conflict kept gains in check and pushed the dollar higher. Expectations of a bumper U.S. earnings season and news that China’s overall global export growth beat expectations led European shares up on Friday with industrials and technology sending the pan-European STOXX 600 up 0.2 percent.
Markets appeared broadly risk-friendly as a weakening safe-haven yen helped lift Japan’s Nikkei stock index .N22 Chinese trade data showed its trade surplus with the United States swelling to a record in June and some fear that could further inflame a trade dispute with Washington.
“The record surplus with the U.S. will inevitably get top billing… China’s exporters have been front-loading exports to beat the imposition of tariffs, implying a relatively sharp drop in coming months,” ADM Investor Services market strategist Mark Otswald said.
With investors braced for the impact of tit-for-tat tariffs, one of China’s main indexes edged lower and China’s yuan headed for its fifth straight week of losses. CNH=EBS
While China has vowed to retaliate to the proposed new U.S. tariffs – 10 percent on $200 billion of Chinese goods – the lack of a specific response to date has sparked global relief.
On Friday, S&P500 e-mini futures ESc1 rose to a five-month high on expectations of solid earnings growth among U.S. firms despite the trade war concern.
5 two percent. That followed the S&P500 hitting four-month highs on Wall Street overnight.
Yet fears about the impact of an escalating U.S.-China trade war continue to cloud the outlook.
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