Last week, stock prices on global markets rose as trade tensions between the US and China eased, and investors were optimistic ahead of the quarterly earnings season for companies.
On Wall Street, the Dow Jones strengthened by 1.8 percent last week, reaching 24,360 points, while the S&P 500 jumped nearly 2 percent to 2,656 points, and the Nasdaq index rose by 2.8 percent to 7,106 points.
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These indices saw a strong increase mid-week after Chinese President Xi Jinping announced that China would reduce import tariffs on certain products, including automobiles.
He also stated that China would allow greater access for foreign investors to its markets, reduce restrictions on foreign ownership in the automotive sector, and protect the intellectual property of foreign companies.
This encouraged investors in capital markets that had been under pressure in recent weeks due to fears of a trade war between the US and China, which could harm global economic growth.
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The rise in stock indices was also supported by the fact that investors are very optimistic ahead of the start of the quarterly earnings season for US companies.
In a Reuters survey, analysts estimate that earnings for companies in the S&P 500 index rose by 18.6 percent in the last quarter compared to the same period last year, which would be the largest earnings jump in the last seven years.
This is attributed to strong global economic growth and tax changes in the US at the beginning of the year.
On Friday, this season began with business reports from three major banks – JPMorgan, Citigroup, and Wells Fargo – which did not impress.
The stock price of the largest US bank by assets, JPMorgan, fell by 2.7 percent that day, Wells Fargo by 3.4 percent, and Citigroup by 1.6 percent.
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“These stocks came under pressure due to weak credit growth. If you did not have these stocks in the last quarter, you will not find anything in today’s numbers that would lead you to buy them,” explains RJ Grant, a director at Keefe, Bruyette & Woods.
In recent days, investors have also been cautious due to geopolitical tensions between the US and Russia regarding Syria.
European stock markets also saw stock prices rise last week. The London FTSE index strengthened by 1.1 percent to 7,264 points, while the Frankfurt DAX rose by 1.6 percent to 12,442 points, and the Paris CAC by 1.1 percent to 5,315 points.
On the Tokyo Stock Exchange, the Nikkei index strengthened by 1 percent to 21,778 points.
