Global Growth Hopes Keep Stocks Near All-Time High By Reuters


2/2 © Reuters. FILE PHOTO: A man stands on a flyover with an electronic board showing the Shanghai and Shenzhen stock indices in Shanghai 2/2

By Marc Jones LONDON (Reuters) – Global stocks took a welcome break near record highs on Wednesday as an International Monetary Fund forecast for the strongest global growth since the 1970s and stable bond and currency markets they kept their appetite for optimistic risk. While the increasing number of COVID cases globally and geopolitical tensions between China and Taiwan and between Russia and Ukraine ensured that it was not a fairy tale, markets certainly got the Goldilocks feel again. just short of the first record it reached in more than a year on Tuesday. The MSCI 50 Country World Index was making a sixth day of gains and Wall Street futures were heading higher as well. In bond markets, there was little sign that benchmark government yields driving global borrowing costs were preparing to skyrocket again. The dollar was sitting quietly in a two-week low. The IMF raised its forecast for global growth to 6% this year from 5.5% on Tuesday, reflecting a rapidly improving outlook for the US economy. If done, that would be the fastest the world economy has grown since 1976, albeit after the steepest annual recession of the postwar era last year, when the COVID pandemic brought trade to a standstill at times. . “Even with great uncertainty about the path of this pandemic, a way out of this economic health crisis is increasingly visible,” said IMF chief economist Gita Gopinath. Overnight, MSCI’s broader Asia-Pacific equity index had started on a firm footing, hitting 208.46 points, a level last seen on March 18. However, it succumbed to the selling pressure and ended flat when China’s first-class CSI300 index fell. 1% and Hong Kong lost 0.9%. Geopolitical tensions in the region added to the nervousness. Taiwan’s foreign minister said Wednesday that it will fight to the end if China attacks, adding that the United States sees the danger that this could happen amid mounting Chinese military pressure, including drills of aircraft carriers, near the Island. Other Asian markets managed to stay positive. closed higher; Australian shares were up 0.6% and South Korea’s 0.3%. Chart: How the financial markets have behaved in the last week PEPP TALK Wall Street futures pointed to a rise of 0, 1% for him, Dow Jones Industrial and Nasdaq. The S&P 500 and the Dow had hit record highs on Monday, fueled by a stronger-than-expected jobs report last Friday and data showing a dramatic rebound in US service industry figures ( ) Next earnings season is expected to show S&P earnings growth of 24.2% over the prior year, according to Refinitiv data, and investors will be watching to see if corporate results further confirm recent data positive economics. All eyes will also be on the minutes of the US Federal Reserve’s March policy meeting when released later. Ten- and five-year Treasury yields fell by 1.6455% and 0.874% respectively in Europe from a high of 1.776% in the 10-year period on March 30. The yield on five-year Treasuries is especially viewed as an important barometer of investors’ faith in the Fed’s message that it does not expect to raise US interest rates until 2024. Yields of European bonds also declined, and southern European debt markets stabilized after a selloff in the previous session, as a 50-year Italy bond was trading. Meanwhile, the European Central Bank will release monthly data on its conventional asset purchases and a bimonthly breakdown of its PEPP pandemic emergency bond purchases that it has promised to increase to keep borrowing costs low. The dollar circled a two-week low of 92.246 against a basket of world currencies. The euro was flat at $ 1.1871, the British pound was weaker at $ 1.3795. The Japanese yen fell slightly to 109.92. In commodities, futures were down to $ 62.67 a barrel. it rose to $ 59.51 and both gold and gold fell to $ 1,736.4 an ounce and $ 8,980 a ton, respectively. “Much of the hopes for a state aid-backed US growth boom and rapid vaccination progress have already been discounted,” Esther Reichelt, FX and EM analyst at Commerzbank (DE 🙂 wrote in a note to the clients. “The additional and more pronounced gains of the USD would only be justified if this boom also caused an increase in inflation rates to which the Fed would have to react with higher interest rates.”