Markets mostly up, US economy seen on “solid footing”

Markets were mostly up on Thursday.

The S&P 500 rose 0.9 percent and the STOXX Europe 600 rose 0.4 percent.

However, Asian stocks fell amid continued concerns over a trade war. The Nikkei 225 fell 0.8 percent and the Shanghai Composite fell 0.9 percent.

However, trade concerns in Europe were somewhat alleviated after a report that a US official had told Germany’s auto chiefs that the US would be prepared to stop threatening to impose stiff tariffs on cars imported from the European Union if the bloc gets rid of tariffs on US cars.

Apart from trade issues, monetary tightening by the Federal Reserve was also in focus on Thursday. Minutes of the last Fed policy meeting showed that there was broad support for continued “gradual” rate increases and that the benchmark federal-funds rate was expected to be at or above its “neutral” level “sometime next year”.

Some analysts appear comfortable with that. Mike Loewengart, vice president of investment strategy at E*Trade, said that “to keep things in perspective, more increases only bring us closer to a normalized rate environment” and that Fed officials “feel we are on solid footing”.

However, DataTrek Research co-founder Nicholas Colas warned on CNBC that consumer spending is on the verge of weakening.

“That’s the beginning of the economy rolling over, and with that stocks," said Colas.