- China’s GDP grew by 6.1% last year in line with expectations
- Google’s parent Alphabet reached $1 trillion in market cap
- Fall in UK retail sales in December raises chances of BoE cutting rates
U.S. stocks opened higher Friday, building on Thursday’s record closing highs, on some good economic data from China.
The Dow Jones Industrial Average gained 33.83 points to 29,331.47 while the S&P 500 climbed 6.98 points to 3,323.79 and the Nasdaq Composite Index gained 32.33 points to 9,389.46.
China said its economy expanded by 6.1% last year, down from a revised 6.6% rate for 2018, but still in line with expectations. The Beijing government had targeted growth of 6% to 6.5% for 2019. China’s official statistics bureau described the economy as being “generally stable” last year.
John Woods, chief investment officer for the Asia Pacific at Credit Suisse, told Bloomberg that China’s industrial production “is quite telling, because more broadly it speaks to the bottoming out in the global industrial-production cycle, which we’ve been looking for and the market’s been looking for the last six to nine months.” Woods added this suggests “the global economy is on a recovering path.”
U.S. housing starts rose 16.9% — the largest gain in three years – in December to an annualized rate 1.61 million after an upwardly revised 1.375 million figure in the prior month. However, building permits fell 3.9% to 1.42 million in December.
U.S. manufacturing output rose unexpectedly by 0.2% in December, following a downwardly revised 1.0% increase in November. Overall industrial output fell by 0.3% in December after a downwardly revised gain of 0.8% in November. Economists had expected both overall industrial output and manufacturing output would fall 0.2% in December.
Capacity utilization fell to 77% in December from an upwardly revised 77.4% in November.
Federal Reserve Bank of Philadelphia President Patrick Harker said the U.S. economy remains in good shape. “My outlook for the economy is positive, but let me add that my outlook will continue to be driven by the data as each report is released throughout 2020,” he said on Friday.
U.K. retail sales fell 0.6% in December from the prior month – the fifth straight month of declines.
“December’s outright fall in retail sales, despite a potential boost from the lateness of Black Friday, does not bode well for GDP growth in December and could nudge the [Bank of England’s] Monetary Policy Committee yet closer still to cutting rates at the end of the month,” said Thomas Pugh, U.K. economist at Capital Economics.
Overnight in Asia, markets finished higher. China’s Shanghai Composite edged up 0.05%, while Hong Kong’s Hang Seng jumped 0.6%, and Japan’s Nikkei-225 rose 0.45%.
In Europe markets traded higher, as Britain’s FTSE-100 surged 0.96%, France’s CAC-40 jumped 1.07% and Germany’s DAX gained 0.72%.
Crude oil futures rose 0.29% at $58.69 per barrel and Brent crude climbed 0.42% at $64.89. Gold futures advanced 0.39%.
The euro slipped 0.31% at $1.11 while the pound sterling fell 0.28% at $1.3042.
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