European and US stocks advance modestly as trade war grinds on

AFP- European and US stock markets won modest gains on Thursday, despite lingering worries over the protracted trade war between Washington and Beijing and its drag on global growth.

Analysts said shares had been oversold during a weak May amid rising trade tensions and a drop in US Treasury bond yields that is seen as a harbinger of economic weakness.
Major US indices finished a choppy session slightly higher, joining London, Paris and Frankfurt, all of which posted somewhat bigger gains. Earlier, Asian bourses finished lower.
"Today has seen US and European markets take a welcome reprieve from the incessant selling that has dominated much of this week," said IG market analyst Josh Mahony.
But David Madden at CMC Markets UK said "the move feels hollow as political and economic relations are still strained" between the United States and China.
In the latest step in the protracted trade war, Chinese state media continued to ramp up criticism of Washington, and Chinese authorities reportedly suspended state purchases of American soybeans.
"We are against the trade war but we are not afraid of it," Chinese Vice Foreign Minister Zhang Hanhui told a media briefing.
"This premeditated instigation of a trade conflict is naked economic terrorism, economic chauvinism, and economic bullying," Zhang added.
President Donald Trump, for his part, told reporters that the tough US strategy built around tariffs was working.
"I can tell you, China very much wants to make a deal," Trump said. "China is becoming a very weakened nation."
– Recession ahead? –
An additional source of unease has been the drop in the yield of the 10-year US Treasury note below the level in a three-month Treasury bill, an "inversion" closely monitored by investors.
"The inverted yield curve is often cited as a precursor to a recession," said a note from National Securities Chief Market Strategist Art Hogan, who added that an inversion doesn’t always precede a recession.
Hogan characterized the turbulence in the bond market as "another situation in the market that requires attention but not panic."
US growth in the first quarter was revised to 3.1 percent, compared to the 3.2 percent growth reported last month, the Commerce Department reported.
Oil prices fell sharply after a smaller-than-expected drop in US crude supplies sparked worries about demand weakness. 
The weekly report also showed US oil production at an all-time high, the latest landmark in the wake of the US shale boom.
– Key figures around 2050 GMT –
New York – Dow: UP 0.2 percent at 25,169.88 (close)
New York – S&P 500: UP 0.2 percent at 2,788.86 (close)
New York – Nasdaq: UP 0.3 percent at 7,567.72 (close)
London – FTSE 100: UP 0.5 percent at 7,218.16 (close)
Frankfurt – DAX 30: UP 0.5 percent at 11,902.08 (close)
Paris – CAC 40: UP 0.5 percent at 5,248.91 (close)
EURO STOXX 50: UP 0.6 percent at 3,318.15 (close)
Tokyo – Nikkei 225: DOWN 0.3 percent at 20,942.53 (close)
Hong Kong – Hang Seng: DOWN 0.4 percent at 27,114.88 (close)
Shanghai – Composite: DOWN 0.3 percent at 2,905.81 (close)
Euro/dollar: DOWN at $1.1130 from $1.1131 at 2100 GMT 
Pound/dollar: DOWN at $1.2613 from $1.2626 
Dollar/yen: UP at 109.61 yen from 109.59 yen 
Oil – Brent Crude: DOWN $2.58 at $66.87 per barrel
Oil – West Texas Intermediate: DOWN $2.22 at $56.59 per barrel

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