US Stock Markets, Treasury Yields Rise, Oil Wobbles As Choppy Week Ends
- Chart: Global Asset Performance http://tmsnrt.rs/2yaDPgn
- Chart: Global exchange rates http://tmsnrt.rs/2egbfVh
- Rising US stock markets, S&P 500 hits record high
- Flash PMI data mixed, COVID concerns hurt outlook
- Oil slips
NEW YORK, July 23 (Reuters) – Wall Street rose on Friday after an eventful week in which investors worried about an increase in COVID-19 cases, spurred by the more contagious Delta variant, while Oil prices fell after a strong recovery from Monday’s fall.
Megacap tech stocks helped push major US indices up, with the S&P 500 (.SPX) and Nasdaq 100 (.NDX) indices reaching record highs. Yields on U.S. Treasuries were also up, as was the greenback, with investors eyeing next week’s Federal Reserve meeting, where the U.S. recovery and the Fed’s support for the economy will be at the center of. attention.
Despite its decline, oil should end the week with little change. Read more
“As long as monetary policy remains this aggressive, stocks will continue to perform well over the long term,” said Steve Massocca, managing director of Wedbush Securities. “There are concerns about the Delta variant. It is a concern that will impact the economy due to government intervention and closures. We are seeing money coming back in names that tend to do well, regardless of economic shutdowns. “
Investors assume that “things will get better, travel is going to increase,” Massocca said.
“If this thesis is jeopardized, it will put a stop to the ‘vertigo’ of the market,” he added.
Business activity in the United States grew at a moderate pace for a second consecutive month in July amid supply constraints, suggesting a slowdown in economic activity, a report by data firm IHS revealed on Friday. Markit. IHS Markit said its US composite PMI output index, which tracks the manufacturing and services sectors, fell to a four-month low of 59.7 from 63.7 in June. A reading above 50 indicates growth in the private sector. Read more
The Dow Jones Industrial Average (.DJI) rose 237.61 points, or 0.68%, to 35,060.96, the S&P 500 (.SPX) gained 37.39 points, or 0.86%, to 4,404.87 and the Nasdaq Composite (.IXIC) added 115.07 points, or 0.78%, to 14,799.66.
The dollar index rose 0.141%. For the week, it is up 0.2%, after increasing 0.6% previously. Read more
The 10-year T-bill yield hovered around 1.3%, nearly 17 basis points higher than a five-month low set on Tuesday, but still was in the low end of a recent range . The benchmark note traded up 1.8 basis points to 1.285%.
The positive earnings helped push European equities higher. But Asian stocks outside of Japan were weaker as anxiety over COVID continued to take its toll.
Financial markets have swung from one direction to the other this week as investors attempt to assess what the burgeoning Delta variant means for the global economy.
After posting its biggest one-day drop since May on Monday, the S&P 500 stock index posted the biggest one-day jump since March a day later. He should end the week higher. The currency, bond and commodity markets experienced similar gyrations.
“The stock markets are reporting some symptoms of fatigue after a long recovery and are recognizing the peak growth environment,” said Antonio Cavarero, investment manager at Generali Insurance Asset Management.
“But in the short term, actual returns are still too low to offer an alternative, so how what happens next depends on COVID and macro data.”
The pan-European STOXX 600 index (.STOXX) rose 1.14%.
The largest MSCI Asia-Pacific stock index outside of Japan (.MIAPJ0000PUS) slipped 0.7%, leaving it down 1.4% on the week.
Japan’s Nikkei (.N225) was closed for a holiday, but down 1.7% for the week and a hair’s breadth down seven months.
Financial market volatility is expected to continue, given the resurgence of the Delta variant and economic uncertainty.
“Uncertainty has increased further with the pandemic,” said Pascal Perrone, bond portfolio manager at Eric Sturdza Investments in Geneva. “I don’t think there will be a shutdown of economies as we saw it last year, but we don’t know.”
(This story corrects the spelling of Analyst Perrone’s last name in the last paragraph, no other text changes)
Reporting by Jessica DiNapoli; additional reporting by Dhara Ranasinghe and Wayne Cole in Syndey; Editing by Ana Nicolaci da Costa, Pravin Char and Dan Grebler
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