Global Markets Rebound on Yellen Speech

25-Sep (WSJ) — Global stocks climbed Friday after Federal Reserve Chairwoman Janet Yellen reassured investors that the U.S. economy is strong enough to support an interest-rate increase.

In a speech on Thursday at the University of Massachusetts in Amherst, Ms. Yellen laid out a detailed case for raising interest rates later this year.

Stock futures indicated a 1.4% opening gain for the S&P 500. Changes in futures aren’t necessarily reflected in market moves after the opening bell.

European markets climbed sharply at the open, rebounding from Thursday’s losses. The Stoxx Europe 600 was 3.1% higher early afternoon, although it remained on track for a weekly decline.

The picture in Asia was more mixed. Japanese stocks wavered as investors digested Ms. Yellen’s speech, but rebounded after a pledge by Japanese Prime Minister Shinzo Abe to strengthen the country’s economy. The Nikkei closed 1.8% higher. China’s Shanghai Composite fell 1.6%.

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PG View: Stocks apparently now like a more hawkish tone from Yellen; it provides the impression anyway that the economy is improving.

Abe and the PMs before him have been pledging to strengthen the Japanese economy for decades, but nobody has really been able to deliver.