Feedback | Wednesday, June 19, 2024

Global Markets Gain with U.S. Stocks; Commodities Surge to Record Levels

U.S. stocks followed the example of their European counterparts, gaining ground on Monday while gold and copper touched all-time highs powered by investor optimism over cooling inflation and easing central bank policy.

All three major U.S. stock indexes were green, led by the tech-heavy Nasdaq.

Copper, a barometer of economic sentiment, surged to a record high after China announced steps to shore up its crisis-hit property sector.

“Historically, when you’ve seen these single commodity run-ups, it has been due to one or more single large economies pulling that investment stimulus lever,” said Brian Nick, senior investment strategist at Macro Institute in New York.

Commentary from U.S. Federal Reserve officials has reflected the central bank’s cautious stance regarding its progress toward reining in inflation and the timing of interest rate cuts.

Fed Vice Chair Philip Jefferson said on Monday it was too early to tell if inflation slowdown is “long lasting,” while Vice Chair Michael Barr said restrictive policy needs more time, and Atlanta Fed President Raphael Bostic said it will “take a while” for the central back to be confident that price growth is on a sustainable downward path.

“Since Powell’s press conference a couple of weeks ago, the speakers that have kind of come out in his wake have been on the on the margins more hawkish than you would expect based on the data that we’re getting,” Nick added.

European stocks advanced, propped up by commodity prices, but held in check by the outlook for interest rates.

The pan-European STOXX 600 index rose 0.17% and MSCI’s gauge of stocks across the globe gained 0.11%.

Emerging market stocks rose 0.11%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.04% higher, while Japan’s Nikkei rose 0.73%.

U.S. Treasury yields drifted higher after Fed officials expressed uncertainty over the timing of interest rate cuts.

Benchmark 10-year notes US10YT=RR last fell 7/32 in price to yield 4.4453%, from 4.42% late on Friday.

The 30-year bond US30YT=RR last fell 12/32 in price to yield 4.5835%, from 4.561% late on Friday.

The dollar held its ground against a basket of world currencies as investors awaited further clues about the path of interest rates in the wake of cautious remarks from Fed officials.

The dollar index rose 0.11%, with the euro EUR= down 0.07% to $1.0862.

The Japanese yen weakened 0.26% versus the greenback at 156.11 per dollar, while Sterling was last trading at $1.2704, up 0.04% on the day.

Crude prices fluctuated as investors weighed geopolitical tensions against hawkish Fed commentary.

Gold and copper both touched record highs, with the former coasting on last week’s encouraging inflation data and the latter getting a boost from Beijing’s property sector stimulus.


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Last Updated: 19th Jun 2024