Stocks rise as US holiday halts interest rate reality check | – #Stocks #rise #holiday #halts #interest #rate #reality #check
LONDON, 20 February (Reuters) – Global stocks on Monday USAMinutes and main of the last meeting of the Federal Reserve in inflation rose as a break for slower trading ahead of a reading on the , which could raise the risk of longer-term interest rate hikes. .
Going towards the biggest monthly rise since September in February dollars, was roughly flat on the day, giving commodity-linked currencies a slight boost thanks to gains in the price of commodities such as crude oil and copper. .
Geopolitical tensions have always been there, with North Korea firing more missiles and Russia stepping up attacks on Ukraine ahead of Friday’s one-year anniversary of the invasion.
There are reports that the White House is planning new sanctions against Russia, Secretary of State Anthony Blinken warned Beijing on Saturday of the consequences of providing material support to Moscow, including arms.
However USA with markets closed for the Presidents Day holiday, non-USA assets got some respite from last week’s relentless pressure.
Latest UpdatesBusinesscategoryChina’s new rules for offshore listings raise concerns over long approval process, imageDealscategoryBritish craft beer firm BrewDog JV deal for China expansion, image article
See 2 more stories
The MSCI All-World index (.MIWD00000PUS) was up 0.2%, supported by a modestly strong start to the day in Europe, where the STOXX 600 (.STOXX) rose 0.2%, breaking Friday’s one-week lows.
Both stock and bond gains in the first six weeks of the year stalled after a wave of US data showed the world’s largest economy holding up better than expected, with interest rates holding up better than expected. it will rise higher and take longer to fall.
JPMorgan global and Europe “Historically, stocks usually don’t go down before the Fed moves forward with cuts, and we’ve never seen a low before the Fed even stops hiking,” said Mislav Matejka, head of equity strategy.
Investors who dismissed warnings from U.S. policymakers that inflation was too high and too persistent for comfort are now coming to terms with the fact that they may be overly optimistic in their assumptions.
PEAK-A-BOO
Money markets indicate that investors now expect US interest rates to peak at 5.3% by July and that a quarterly rate cut could materialize by December.
That marks a big change from expectations in early February for a peak below 5% by July and the first rate cut coming a few weeks later.
“It may be premature to believe that a recession is now off the table when the Fed is expected to do 500bp+ of tightening in a year and monetary policy is felt to lag the real economy by as much as 1. – 2 years”, Matejka from JPMorgan said.
“The damage has been done and the damage is probably still ahead of us,” he said.
S&P 500 and Nasdaq futures fell 0.1%. The S&P hit a two-week low on Friday.
“This is the most aggressive Fed tightening in decades, and US retail sales are at an all-time high; unemployment at 43-year low; January month labour the fee has increased by more than 500 thousand and CPI/PPI inflation has started to accelerate again”, BofA analysts noted. “This is the Fed’s most unfulfilled mission.”
They are 4 of the S&P 500,20Failure to break the resistance at 0 could lead to a decline to 3,800 by March 8, they said.
The release of minutes from the Fed’s last meeting on Wednesday could provide more insight into policymakers’ deliberations, but the meeting january bumper of the bear labour may have less of an impact than usual because it takes place after the fee reports and retail sales reports.
In addition, the preferred Fed inflation measure, the core personal consumption expenditures index (PCE), fell on Friday. January It is expected to rise 0.4%, the biggest gain in five months, while the annual pace is forecast to slow to 4.3%.
Dollar was trading slightly lower against a basket of major currencies, but notably lower than so-called commodity currencies such as the Australian dollar, which gained 0.4%, and the Canadian dollar, which gained 0.1%.
Brent crude oil futures, which fell nearly 4% last week, rose 1% to $83.75 a barrel, while copper futures traded up 0.5% to 9.033% ton/tonne. Both are highly sensitive to the health of China’s economy, which is still recovering from three years of COVID lockdowns.
China’s offshore yuan, in recent days bank It rose 0.2% to around 6.86 against the dollar after Beijing held interest rates steady as expected, pouring excess liquidity into its system. Chinese shares (.CSI300) also rose 1.1%.
Earnings season continues this week with major retailers Walmart ( WMT.N ) and Home Depot ( HD.N ) preparing to provide updates on consumer health.
Added by Wayne Cole in Sydney report; Edited by Shri Navaratnam, Christian Schmollinger, and Philippa Fletcher
Our standards: Thomson Reuters Trust Principles.
2023-02-20 14:18:04
Source – reuters
Translation“24 HOURS”