Global Markets: Global stock index edges up, dollar dips after US inflation reading

Applied Energetics

26/01/2024 22:06

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      World stock index stick near 2-year highs
    

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      Oil settles higher, shows second consecutive weekly gain 
    

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      U.S. dollar eases, Treasury yields rise
    

  
 (Updated prices after U.S. stock market close)
    By Sinéad Carew and Marc Jones
       NEW YORK/LONDON, Jan 26 (Reuters) - MSCI's global stock
index barely rose on Friday while the U.S. dollar edged down
after the U.S. Federal Reserve's favored inflation reading
showed moderating prices and investors waited anxiously for
clues on interest rate policy days ahead of the central bank's
closely monitored meeting.
     Treasury yields rose on concerns about the growing supply
of government debt, with next week's Federal Reserve meeting in
focus and expectations that the Fed will have to address efforts
to reduce its balance sheet.
    The personal consumption expenditures (PCE) price index
increased 0.2% last month after an unrevised 0.1% drop in
November, the Commerce Department's Bureau of Economic Analysis
said. In the 12 months through December, the PCE price index
increased 2.6%, matching November's unrevised gain.
    Still, pending U.S. home sales shot up in December by the
most since June 2020, indicating prospective buyers may be
getting drawn from the sidelines by stabilizing mortgage rates.
    "Broadly this week we got a nice support for the soft
landing scenario," said Mona Mahajan, principal and senior
investment strategist, Edward Jones, New York citing Friday's
inflation reading, Thursday's strong GDP data and improving
manufacturing and services data earlier in the week.
    But Mahajan detected jitters ahead of the Fed's meeting, 
ending on Jan. 31, as the central bank will likely "acknowledge
the better inflation and economic data but may still push back
on the markets pricing of six rate cuts this year".
    "Investors are in wait and see mode," she said, adding that
regarding inflation, the Fed "will probably not yet declare
mission accomplished". 
    The MSCI world equity index  .MIWD00000PUS , which tracks
shares in 49 nations, gained 0.08%, after earlier hitting its
highest level in almost two years. For the week it was showing a
1.3% gain.    
    Wall Street indexes were a mixed bag with the S&P 500  .SPX 
snapping a 5-session streak of record closing highs, falling
3.19 points, or 0.07%, to 4,890.97 on the day.  
    For the week the benchmark index added 1% while the Nasdaq
added 0.9% and the Dow industrials advanced 7%, with all three
clocking their third weekly gain in a row and their 12th weekly
gain out of the last 13 weeks. 
        For Friday's session, the Dow Jones Industrial Average
 .DJI  rose 60.30 points, or 0.16%, to 38,109.43, and the Nasdaq
Composite  .IXIC  lost 55.13 points, or 0.36%, to 15,455.36.  
    Europe's  .STOXX  equity index earlier closed up 1.1%,
marking a 3% gain for the week, which was its biggest weekly
percentage advance since the week starting Oct. 30.
    This was after the European Central Bank (ECB) signaled on
Thursday that it could cut rates by April. While ECB chief
Christine Lagarde said it was "premature" to discuss easing,
money markets priced an almost 85% chance of a first quarter
point rate cut in April  EURESTECBM3X4=ICAP .  GVD/EUR     
    In currencies, the dollar index  =USD , which tracks the
greenback against a basket of currencies of other major trading
partners, was down 0.04%  . 
    The dollar rose 0.3% against the yen to 148.09  JPY=  but
the euro  EUR=  was up 0.1% on the day at $1.0855, having lost
1.64% in a month.
    In Treasuries, the yield on benchmark 10-year Treasury notes
 US10YT=RR  rose to 4.1412% compared with its U.S. close of
4.132% on Thursday. The two-year yield  US2YT=RR , which rises
with traders' expectations of higher Fed fund rates, touched
4.3571% compared with a U.S. close of 4.314%. 
    In commodities, oil prices settled higher as positive U.S.
economic growth and signs of Chinese stimulus boosted demand
sentiment, while Middle East supply concerns added support.
    U.S. crude  CLc1  settled up 0.84% at $78.01 a barrel, their
highest settlement level since Nov. 29. Brent crude  LCOc1 
finished at $83.55 per barrel up 1.36% on the day for their
highest closing level since Nov. 30.
    In precious metals, spot gold prices  XAU=  fell 0.06% to
$2,018.58 an ounce as investors' attention shifted to the Fed's
policy meeting next week as they waited for insights into the
interest rate outlook.    
    Earlier in Asia, MSCI's broadest index of Asia-Pacific
shares excluding Japan  .MIAPJ0000PUS  closed down on the day
but snapped a three-week losing streak for a 1.6% weekly rise. 
    China's CSI blue-chip index  .CSI300  dipped on Friday but
scored a near 2% weekly gain after three weeks of losses. 
    Investors poured almost $12 billion into Chinese equity
funds in the week to Wednesday, a BofA Global Research report
calculated on Friday. That marks the largest inflow since 2015
and the second largest ever.  

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Mission accomplished?    https://tmsnrt.rs/3MODeXb
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 (Reporting by Sinéad Carew in New York, Marc Jones in London,
Amruta Khandekar in Bengaluru; Editing by Alex Richardson, Mark
Potter and Diane Craft)
 ((sinead.carew@thomsonreuters.com; +13322191897))
 
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