World stock markets were trading volatile last week because the trade war between the US and China is not in sight, while the markets were supported by better-than-expected quarterly business results of companies and banks.
On Wall Street, the Dow Jones index gained 1.6 percent last week, to 46,190 points, while the S&P 500 rose 1.7 percent, to 6,664 points, and the Nasdaq 2.1 percent, to 22,679 points.
Indices last week made up most of the losses from the previous week, but trading was uncertain, given that trade tensions between the world’s two largest economies are not easing.
Ten days ago, US President Donald Trump threatened to introduce 100 percent tariffs on China from November 1, as well as other measures, after China restricted the export of rare earth minerals.
In recent days, Trump has softened his rhetoric, but investors are not sure that he will not tighten it again soon.
“Investors are not sure how to understand Trump’s statements. There are a lot of negative and positive comments about China and tariffs, but also about everything else,” says Robert Pavlik, portfolio manager at Dakota Wealth.
However, the market was supported by the better than expected quarterly business results of companies and the largest American banks.
That’s why analysts in a Reuters survey now estimate that the earnings of companies from the S&P 500 index in the third quarter increased by 9.3 percent compared to the same period last year, while at the beginning of the financial reporting season they expected an increase of 8.8 percent.
But while the largest US banks reported better-than-expected results, regional banks are not doing so well and are reporting problems.
“The stock prices of some regional banks and financial institutions that are particularly sensitive to loans have fallen sharply. Perhaps the quality of loans is deteriorating,” said Chuck Carlson, an analyst at Horizon Investment Services.
However, on Friday, that sector also recovered somewhat. Namely, on Thursday, the S&P 1500 index of regional banks sank almost 6 percent, but on Friday it rose by about 2 percent.
And on most European stock exchanges, share prices fell last week. The London FTSE index slipped 0.8 percent, to 9,354 points, and the Frankfurt DAX 1.7 percent, to 23,830 points.
The Paris CAC jumped, on the other hand, by 3.2 percent, to 8,174 points, which is thanks to the partial calming down of the situation after the fall of the previous government and the election of a new one, but also to the better than expected business results of most companies.
