Equity pays attention to the rise in the third week after the tech boost and the fall in the dollar

File Photo: There is a sign outside the entrance to the London Stock Exchange in London, England. August 23, 2018.Reuters / Peter Nicholls / File Photos

October 22, 2021

Simon Jessop

London (Reuters) – While the dollar has fallen and crude oil prices have bounced off lows, Friday’s global equities have gained technical boosts to help stop the rise for the third straight week on Friday.

MSCI’s widest global market share rose 0.1%, rising 1.4% this week, just 0.8% below its all-time high. All of Europe’s top markets are up, with the largest UK FTSE 100 up 0.4%.

Following the rise in Asia, Japan’s Nikkei Stock Average rose 0.3%, driven by the technology sector. The news that the Chinese real estate company Evergrande Group has made a surprising interest payment and has evaded defaults for now also eased the bullishness of the stock.

Risk-on-tone, despite growing investor concern that sustained inflation could force central banks to tighten monetary policy as global economic growth remains fragile It happened.

Data on Friday show that inflation expectations in the euro area are the highest in the last few years, amid a flood of warnings from companies such as Nestle, ABB and Unilever.

Germany’s break-even point inflation rate, which represents the difference between yields on nominal bonds and their inflation-indexed bonds, has risen to about 1.81%, the highest since April 2013.

Neil Biller, chief investment officer of asset manager Premier Mittens, said rising prices could weigh on growth in the euro area in October and set the stage for a tough European Central Bank meeting next week. Said there is.

“The ECB will meet next week. There is a lot of discussion about the economic downturn and rising inflation. Addressing inflation spikes is under pressure, but policy changes need to be carefully addressed. “

Mark Hefere, chief investment officer at UBS Global Wealth Management, said in a note to customers despite concerns that inflationary pressure could tighten monetary policy too early for the government. , Said stocks could still rise.

“We believe the stock market will continue to rise as the current problem still seems to be temporary rather than structural,” said Hefere.

“Sure, a slight increase in inflation expectations could be positive for the market if it helps eliminate the fear of deflation. Moreover, according to our assessment, global growth continues. It’s strong, supply chain challenges should recede until 2022, and corporate profits should continue to grow. “

US stock futures have shown a flat open on Wall Street after the cash index hit a high overnight, driven by a surge in tech stocks.

Next week, Facebook, Apple, Amazon, and Google owners Alphabet will all report and expect to be able to track higher-than-expected revenue from Netflix this week.

Meanwhile, the benchmark 10-year government bond yield was 1.6908%, recovering overnight from its five-month high of 1.7050%.

After the U.S. unemployment claims fell to a 19-month low, the dollar index, which measures greenback against six major rivals, fell 0.1% to 93.634, initially rebounding from recent lows. It shows a tight labor market.

The Federal Reserve Board has suggested that continued rate hikes late next month could start curtailing stimulus measures sooner next month. Full employment is one of the Fed’s stated requirements for rate hikes.

Federal Reserve Board Chair Jerome Powell will speak in a panel discussion later Friday.

Throughout commodities, crude oil prices rose 0.3%, bouncing off overnight lows. Both Brent Crude and West Texas Intermediate were in the black for a week, threatening to break the win for a few weeks before.

Gold rose 0.4% against the backdrop of a weaker dollar, but the rise in the second week was not surprising.

(Additional report by Kevin Buckland, Tokyo, edited by Simon Cameron Moore and Hugh Lawson)

Equity pays attention to the rise in the third week after the tech boost and the fall in the dollar

Source link Equity pays attention to the rise in the third week after the tech boost and the fall in the dollar

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