Volkswacht Bodensee - Resilient US economy spurs on stock markets

New York -- whose S&P 500 and Nasdaq Composite struck record highs on Thursday -- held on to gains, even if the Dow struggled a little at the start.

Most European and Asian markets were pulled higher as well.

Only Tokyo faltered, dragged down ahead of weekend upper-house elections that could spell trouble for Prime Minister Shigeru Ishiba.

"The positive tone to risk sentiment is continuing on Friday, after a week of record highs for global equities," said Kathleen Brooks, research director at the XTB trading group.

Caution over high valuations was being put aside, for now, as were worries about Trump's threats of further tariffs if governments did not agree trade deals by August 1.

"With the president toning down his rhetoric, markets are quick to forget tariff risks and concentrate on the positives including a resilient US economy," Brooks said.

The overall optimism was fuelled by data suggesting the US economy was doing well, including healthy retail activity and above-forecast results from America's biggest banks.

A June consumer price index report released this week "does not reveal tariff-induced price increases, but a closer look shows clear signs" they could be building, said Holger Schmieding, chief economist at Berenberg bank.

"We expect (US) annual core inflation to approach 3.5 percent by year-end and the Fed to hold the policy rate at the 4.25-4.50 percent target range," he said.

The dollar retreated on Friday as traders bet on the Federal Reserve cutting US interest rates.

One Federal Reserve governor, Christopher Waller, on Thursday argued for a July rate cut, saying he saw limited upside inflation risks.

Trump this week denied he was planning to sack Fed boss Jerome Powell, whom he had been urging to reduce US borrowing costs to further boost the world's top economy.

A meeting in South Africa of G20 finance ministers -- including US representation -- on Friday pointedly stressed that "central bank independence is crucial" around the world.

In corporate news, American Express followed financial sector peers in reporting better-than-expected second-quarter results.

Results from streaming giant Netflix also outperformed, though its share price slipped on Friday as investors weighed its valuation.

In London, British luxury brand Burberry said sales had not fallen as much as analysts expected, "which is a sign that the company’s new strategic direction could be working", said XTB's Brooks.

On the downside, shares in GlaxoSmithKline slid more after the British pharmaceutical giant reported a US regulatory setback for its blood cancer drug Blenrep.

Oil prices rose, supported by fresh EU sanctions aimed at crimping Russia's crude exports to pressure Moscow over its war on Ukraine.

- Key figures at around 1345 GMT -

New York - Dow: DOWN 0.1 percent at 44,441.23 points

New York - S&P 500: UP 0.2 percent at 6,309.96

New York - Nasdaq Composite: UP 0.3 percent at 20,952.31

London - FTSE 100: FLAT at 8,975.89

Paris - CAC 40: UP 0.1 percent at 7,828.93

Frankfurt - DAX: DOWN 0.2 percent at 24,323.11

Tokyo - Nikkei 225: DOWN 0.2 percent at 39,819.11 (close)

Hong Kong - Hang Seng Index: UP 1.3 percent at 24,825.66 (close)

Shanghai - Composite: UP 0.5 percent at 3,534.48 (close)

Euro/dollar: UP at $1.1667 from $1.1600 on Thursday

Pound/dollar: UP at $1.3465 from $1.3415

Dollar/yen: DOWN at 148.25 yen from 148.60 yen

Euro/pound: UP at 86.63 pence from 86.43 pence

Brent North Sea Crude: UP 0.9 percent at $70.15 per barrel

West Texas Intermediate: UP 1.0 percent at $66.88 per barrel

burs/rmb/jhb

G.Haefliger--VB