- S&P futures up 0.9%, European stocks up 1.5%
- MSCI global stocks expect 2.5% weekly growth
- Copper falls by more than 7% during the week, oil by 2%
- German 10-year bond yields fell by 4 basis points
LONDON, June 24 (Reuters) – Global stocks were heading for their first weekly profit in a month, and Wall Street was set to open higher on Friday in hopes that the fall in copper and other commodities could put a stop to endless inflation.
The week was marked by a sharp decline in commodities amid fears that the global economy appears volatile and that rising interest rates will hurt growth – which in turn is pushing traders to lower inflation expectations and cut some stakes on the size of the rises.
“Inflation will remain above the target, but it is increasingly likely to reach its peak in the next few months,” said Andrew Hardy, investment manager at Momentum Global Investment Management.
Register now for FREE unlimited access to Reuters.com
I’m registering
“Markets could take this quite well – there is potential for recovery later in the year.”
US S&P futures rose 0.9 percent and MSCI’s global stock index (.MIWD00000PUS) rose 0.5 percent during the day and 2.5 percent during the week, setting it for its first weekly earnings in May.
Copper, a leader in economic production with its wide range of industrial and construction applications, is heading for its steepest weekly decline since March 2020. It fell in London and Shanghai on Friday and fell more than 7% during the week.
Tin fell nearly 15 percent on Friday, losing a record 25 percent this week as investors fear a slowdown in economic growth will reduce demand for the metal used in electronics solder.
Brent crude futures rose more than $ 1 to $ 111.28 a barrel on Friday, but remained down 2% for the week and 10%
during the month, as reference grain prices sank, with wheat in Chicago falling by more than 8% for the week.
Gold rose 0.2 percent to $ 1,826.30 an ounce, but headed for a second straight weekly decline.
The fall in prices offered some easing for stocks, as energy and food were the drivers of inflation.
European stocks (.STOXX) jumped 1.5% to post small weekly earnings. The British FTSE (.FTSE) rose 1.3%, also showing a small increase during the week.
“For long-term investors, history has not changed – falling markets offer more attractive valuations to high-quality companies with a competitive advantage,” said Lewis Grant, senior portfolio manager for global equities at Federated Hermes.
The Federal Reserve’s commitment to controlling 40 years of inflation is “unconditional,” US Central Bank chief Jerome Powell told lawmakers on Thursday, while acknowledging that sharply higher interest rates could lead to higher unemployment. Read more
Germany is heading for gas shortages if Russian gas supplies remain as low as they are now due to the conflict in Ukraine and some industries will have to close if there are not enough in the winter, Economy Minister Robert Habeck told Der Spiegel on Friday. Read more
Ukraine says Russian forces have “completely occupied” a city south of the strategically important city of Lisichansk in the eastern Luhansk region since Friday. Read more
Bonds rose sharply in hopes that bets on aggressive interest rate hikes would have to be curtailed, with Germany’s two-year yield falling 26 basis points on Thursday, the biggest drop since 2008.
The German 10-year yield fell 4 basis points on Friday after falling 29 basis points on Thursday, heading for its first weekly decline since mid-May.
The 10-year reference yield on government bonds rose 4 basis points to 3.1076% after falling 7 basis points on Thursday
Bond funds suffered their biggest flows from April 2020 in the week to Wednesday, while shares lost $ 16.8 billion as markets were blocked in a maximum downturn, BofA’s weekly analysis of flows showed on Friday.
The US dollar fell from 20-year highs last week. The euro rose 0.23% to $ 1.05470, while the US currency remained at 135.03 yen.
The battered yen stabilized this week and received little support on Friday from Japanese inflation, which exceeded the Bank of Japan’s 2% target for the second month in a row, putting more pressure on its ultra-easy political position. Read more
MSCI’s broadest Asia-Pacific stock index outside Japan (.MIAPJ0000PUS) rose 1.1 percent, helped by short-term retailers from Alibaba (9988.HK) – up nearly 6 percent – amid hints that technological repression in China is waning.
The Japanese Nikkei (.N225) rose 1.2% for a weekly gain of 2%.
Register now for FREE unlimited access to Reuters.com
I’m registering
Additional reports from Bridge Patel in Bengaluru, Tom Westbrook in Singapore and Sam Byford in Tokyo; edited by Jacqueline Wong, John Stone Street and Andrew Havens
Our standards: Thomson Reuters’ principles of trust.
Add Comment