Home News World Shares Near Record High on Strong US Economic Data and Earnings

World Shares Near Record High on Strong US Economic Data and Earnings

World Shares Near Record High on Strong US Economic Data and Earnings

World stocks held near a record high as strong US economic data, robust corporate earnings, and the Federal Reserve’s commitment to continue supporting the economy fuelled investors’ appetite for risk.

Asian stocks had less luck, with MSCI’s ex-Japan index losing 0.6 percent, following a softer-than-expected survey on China’s manufacturing.

“China’s economic recovery in January-March was strong but there are some doubts over whether you can take it at face value,” said Wang Shenshen, senior strategist at Mizuho Securities.

Chinese tech giant shares listed in Hong Kong also buckled as Beijing summoned 13 internet platforms to order them to strengthen compliance with regulations, weighing on the Hang Seng index.

Mainland Chinese shares lost 0.25 percent while Japan’s Nikkei shed 0.7 percent on position adjustments ahead of a long weekend. Both markets will be closed through Wednesday.

European stocks are expected to dip slightly, with euro Stoxx futures down 0.1 percent and Britain’s FTSE futures trading 0.2 percent lower.

MSCI’s broadest gauge of world stocks covering 50 markets, ACWI, however, was little changed and stood close to a record peak touched the previous day and up 5.1 percent on the month.

On Wall Street, the S&P 500 also closed at an all-time high while the Nasdaq Composite hit an intraday record before paring some gains.

For both ACWI and S&P500, analysts are now expecting the earnings in the next 12 months to recover to above their pre-pandemic levels.

With just over a half of S&P500 companies reporting earnings, about 87 percent beat market expectations, according to Refinitiv, the highest level in recent years.

Amazon was the latest to report stellar results late on Thursday, lifting its shares by 2.4 percent in after-hours trade.

Data on Thursday showed US economic growth accelerated in the first quarter, fuelled by massive government aid to households and businesses.

New York City aims to “fully reopen” on July 1 after more than a year of closures and capacity restrictions, Mayor Bill de Blasio said, buttressing hopes for a recovery in the battered service sector, an important source of employment.

That came against the backdrop of the Federal Reserve’s reassurance on Wednesday that it is not time yet to begin discussing any change in its easy monetary policy.

The 10-year US Treasury yield rose to 1.690 percent, its highest in more than two weeks, and last stood at 1.640 percent.

“For now we are likely to see strong economic data from the US and that means we need to be wary of further rise in US bond yields, and the dollar/yen,” said Toshiya Nakamura, chief manager of forex trading at Mitsubishi Trust Bank.

In the currency market, the yen was listless at 108.79 per dollar, having hit a two-week low of 109.22 as higher US bond yields helped the dollar.

The positive risk mood saw the euro extending its bull run to a two-month high of $1.2150 in the previous session and it last stood at $1.2115. With 3.3 percent gains so far this month, it is on course for its biggest monthly rise in 9 months.

The Canadian dollar extended its gains to a three-year high of C$1.22715 per US unit, boosted by the Bank of Canada’s tapering of its bond-buying program and higher commodities including oil and lumber.

Oil prices took a breather after hitting six-week highs on strong US economic data.

Brent slipped 0.8 percent to $68 per barrel, after having hit a high of $68.95 on Thursday while US West Texas Intermediate (WTI) eased 0.9 percent to $64.41 per barrel.

“Strong US data is supporting the market. But on the other hand, given that oil producers have capacities to boost outputs further, there will be resistances around $65 for WTI and $70 for Brent,” said Tatsufumi Okoshi, senior commodity strategist at Nomura Securities.

Fiscal Stimulus Bolsters US Economic Growth in Q1, Fastest GDP Growth Since 2003

The second-fastest gross domestic product growth since the third quarter of 2003, reported by the Commerce Department on Thursday, left output just 0.9% shy of its level at the end of 2019.

US Economy Grew Robustly in First Quarter

GDP grew at a 6.4% annual rate in the quarter, leaving the economy within 1% of its peak.

Asia-Pacific Markets Broadly Lower As Investors Turn Cautious

Asia-Pacific markets struggled for gains Friday as investors turned cautious, despite a positive finish stateside in the previous session.

World Shares Near Record High on Strong US Economic Data and Earnings

US economic growth accelerated in the first quarter, fuelled by massive government aid.

How the US Won the Economic Recovery

I looked for a country that got the economic response to Covid-19 right. I found the US.

Barclays Boss Predicts Biggest Economic Boom Since 1948

The UK is about to experience its biggest economic boom since the aftermath of World War Two, according to Barclays boss Jes Staley. His upbeat...

Buying American Is Easier Said Than Done: Will Biden’s Plan Juice the US Economy?

Joe Biden and Donald Trump don't agree on much, but this much they do: We should buy American products. But that's easier said than done.

Silver Down As Dollar and Yields on Bonds Rose as US Economy Advanced

Benchmark U.S. 10-year Treasury yields hovered near a more than two-week high, increasing the opportunity cost of holding non-yielding bullion.

Yellen Doesn’t See Biden Plan Creating Inflation ‘Issue’

President Joe Biden’s economic plan is unlikely to create inflation pressure in the U.S. because the boost to demand will be spread over a decade, said Treasury Secretary Janet Yellen.

Inflationary Pressure, Hawkish Fed Official Remarks Keep US Stocks on Leash

Dow added 2.4%, the S&P 500 gained 5.6%, and the Nasdaq jumped 7%. Dow was down 0.54% at 33,875 while the S&P was down by 0.72%. Nasdaq was down by 0.85%.