Japanese Strong Economic Indicators Boost Global Stocks

Long-awaited signs of improvement in Japan’s economy and growth in U.S. manufacturing pushed global stocks higher on Monday.

The ISM manufacturing survey for the U.S. showed a rebound in June thanks to new orders and higher production. The increase to 50.9 points from May’s 49 shows the sector is expanding once again. A reading above 50 suggests growth, while those below indicate contraction.

The survey showed employment in the sector remained weak, however, suggesting companies are still cautious about the future.

The survey boosted stock markets as investors estimated it was strong enough to show the recovery is on track, but not so strong as to encourage the Federal Reserve to start ending its monetary stimulus program ahead of time.

In Europe, Germany’s DAX rose 0.3 percent to close at 7,983.92 while France’s CAC-40 gained 0.8 percent to 3,767.48. Britain’s FTSE 100 rose 1.5 percent to 6,307.78.

On Wall Street, the Dow was up 1.1 percent to 15,070.68 while the broader S&P 500 was 1.2 percent higher at 1,625.53.

via Mainichi

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency
trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza