Friday saw a rise in global markets as carefully monitored U.S. Treasury rates rose and U.S. inflation data reinforced hopes of an interest rate decrease this year. The S&P 500 crossed the 5,000-point milestone for the first time.
The dollar dropped 0.06%, reversing earlier gains. Oil LCOc1 saw a weekly increase as a result of concerns about escalating hostilities in the Middle East following Israel’s rejection of a Hamas truce offer.
For the third consecutive week, the MSCI All Country stock index (.MIWD00000PUS), opens a new tab, increasing by 0.4%. Wall Street lifted the atmosphere in the financial markets as the S&P 500 index (.SPX) opened a new tab, surpassed 5,000 points, aided by significant advances in mega-cap firms like Nvidia (NVDA.O), opening a new tab.
The chipmaker reached a record high on Reuters’ story of constructing a new business division.”The new closing high over 5,000 bodes well over the intermediate to longer term, with a key technical level being cleared today,” said Larry Tentarelli, Chief Technical Strategist at Blue Chip Daily Trend Report, based in North Andover, Massachusetts. “We believe that the combination of very strong corporate earnings, strong jobs data, strong GDP data, and declining inflation is an excellent backdrop for equities going forward.”
According to statistics released on Friday, U.S. monthly consumer prices increased less in December than first anticipated, although underlying inflation stayed rather mild. Expectations for adjustments in central bank rates were not significantly affected by the data revision.
Next week will provide January’s U.S. inflation statistics.
The S&P 500 (.SPX) gained 28.70 points, or 0.57%, to 5,026.61; the Nasdaq Composite (.IXIC) gained 196.95 points, or 1.25%, to 15,990.66; and the Dow Jones Industrial Average (.DJI) opened with a new tab that slipped 54.64 points, or 0.14%, to 38,671.69. Late on Thursday, the yield on the benchmark 10-year U.S. note increased by 0.7 basis points to 4.177%.
The yield on the 2-year note, which usually follows forecasts for interest rates, increased by 3.2 basis points to 4.4883% late on Thursday from 4.456%. The higher rates put pressure on gold prices, with spot gold down 0.44% to $2,024.16 an ounce. At $2038.7, US gold futures ended the day 0.4% down.
U.S. and Brent oil futures ended the day up by 0.8% and 0.7%, respectively, at $76.84 and $82.19 a barrel. Due to pressure from rising interest rates and declining L’Oreal shares, European equities closed marginally down. Despite closing 0.1% down, the pan-European STOXX 600 index (.STOXX) managed to achieve a 0.2% weekly improvement.
L’Oreal (OREP.PA), which opens a new tab, had a 7.6% decline in sales following the release of its lackluster fourth-quarter sales growth report. The largest economy in Europe, Germany, had a decrease in inflation in January to 3.1%, which fueled speculation about when the European Central Bank might start lowering interest rates.
Nonetheless, as many ECB rate-setters cautioned against relaxing monetary policy too soon, euro zone bond rates rose to multi-week highs. “Indeed, it seems pretty clear now that the ECB will be waiting for European wage data statistics at the end of April before likely cutting rates in June,” a report from ING stated.
Japanese stock markets reached 34-year highs. After hitting a 10-week low, the yen bounced back as traders reevaluated their bets on the speed at which the Bank of Japan may hike interest rates.
The mainland markets in China were closed, while Hong Kong closed early due to little trading. The Hang Seng (.HIS) opened a new tab down 0.8% on concerns that the authorities would not follow through on their assurances of assistance.
“I am betting that (decisive action) is happening,” BNP Paribas Asset Management senior markets strategist for Asia Pacific, Chi Lo said.
- Published By Team Genuine Reporter