San Francisco Frontiers - Stock rally rolls on as profits please and recession worries ease

The European single currency meanwhile struck $1.1248, the highest level since February 2022, and oil prices slid before the weekend.

The US corporate earnings season got into full swing with big-hitting banks Citigroup, JPMorgan and Wells Fargo all reporting better-than-expected results or outlooks.

"One key point to watch for here will be impairments -- even though the monetary policy tightening cycle appears to be closing in on its peak, has the Fed overcooked the situation and will this now leave a lasting scar on economic performance?" noted Scope Markets analyst Joshua Mahony.

JPMorgan Chase reported a 67 percent jump in second-quarter profits to $14.5 billion, but also added reserves of $1.5 billion in case of bad loans, although most of that was tied to its acquisition of First Republic Bank under a government-orchestrated spring auction after the smaller lender suffered a fatal run on deposits. Its shares climbed 1.9 percent shortly after trading got underway.

Wall Street opened higher, with the Dow climbing 0.5 percent. In Europe, London and Paris were higher in afternoon trading while Frankfurt dipped.

Shares in Wells Fargo bank rose 2.4 percent after it beat revenue and earnings estimates, with net profit rising 58 percent to $4.9 billion. Citigroup shares slid after it reported a 36 percent drop in profits, although it still beat expectation.

Traders welcomed this week more data showing falling US inflation, giving the Fed room to bring the curtain down on more than a year of rate increases.

Global equities have been bubbling on hopes for an end to monetary tightening aimed at taming inflation, which was fuelled by post-Covid reopening, supply chain snarls and Russia's invasion of Ukraine.

That has come just as China pledges to introduce measures to kickstart its stuttering economy and bring an end to a painful crackdown on the huge tech sector.

Wall Street cheered news Thursday that wholesale prices rose less than expected in June. That followed Wednesday's report showing the consumer price index below forecasts.

While the CPI remains above the Fed's target, analysts said there is growing confidence that officials were winning their battle and the economy could avoid a feared recession.

Despite a Fed official saying he thinks two more rate hikes are possible this year the "market still believes it is one-and-done for the Fed", said Briefing.com analyst Patrick O'Hare.

"In any case, the stock market is winning the fight for now, because it remains evident in the strong labor market that the economy is still battling well in the wake of the Fed's prior rate hikes," he added.

Thursday's upbeat mood filtered through to Asia, where Hong Kong rose for a fifth successive day thanks to a bounce in Chinese tech giants.

Shanghai, Sydney, Seoul, Singapore, Taipei, Mumbai, Bangkok, Manila and Jakarta also gained.

However, Tokyo struggled owing to a pick-up in the yen against the dollar, which has come under pressure against its peers owing to lower expectations about US rates.

- Key figures around 1330 GMT -

New York - Dow: UP 0.5 percent at 34,550.64 points

London - FTSE 100: UP 0.5 percent at 7,474.92

Paris - CAC 40: UP 0.3 percent at 7,394.87

Frankfurt - DAX: DOWN less than 0.1 percent at 16,131.41

EURO STOXX 50: UP 0.4 percent at 4,407.30

Tokyo - Nikkei 225: DOWN 0.1 percent at 32,391.26 (close)

Hong Kong - Hang Seng Index: UP 0.3 percent at 19,413.78 (close)

Shanghai - Composite: FLAT at 3,237.70 (close)

Euro/dollar: UP at $1.1228 from $1.1226 on Thursday

Dollar/yen: UP at 138.89 yen from 138.03 yen

Pound/dollar: DOWN at $1.3107 from $1.3134

Euro/pound: UP at 85.66 pence from 85.47 pence

Brent North Sea crude: DOWN 0.5 percent at $80.96 per barrel

West Texas Intermediate: DOWN 0.5 percent at $76.51 per barrel

burs-rl

M.Powell--SFF