Thursday, May 19 2022

Bullish and bearish symbols for successful and bad trades can be seen outside the German Stock Exchange (Deutsche Boerse) in Frankfurt, Germany on February 12, 2019. REUTERS / Kai Pfaffenbach / File Photo

LONDON, Oct. 25 (Reuters) – Global stocks came to a halt near six-week highs on Monday as investors braced for the busiest third-quarter earnings week amid slowing growth, with risks rising inflation due to crude oil prices which have risen over several years. about feelings.

Risk assets have made a comeback in recent weeks after a scorching September as investors shunned bonds. Allocations to bond markets fell to an all-time low in October, according to the monthly survey of fund managers at BofA Securities.

The shift in allocations shows that equity investors are broadly unfazed by the general slowdown in economic dynamics and the implicit inflation risks in the market on both sides of the Atlantic which are running towards multi-year highs.

European stocks (.STOXX) edged up as energy, health care and financials led the gains, while US stock futures held on as investors ignored the impact possible announcement of a pilot property tax in China and persistent problems in the sector. Read more

“This resilience may reflect the happy earnings season so far, but rising yields, consumers squeezed by higher energy bills and no looming relief for crippled supply chains does not appear to be the recipe for. greater volatility from record highs, “said Marios Hadjikyriacos, a senior investor. analyst at IM brokerage.

The S&P 500 (.SPX) is just below its all-time high and the number of companies that beat expectations in the third quarter is now close to 84%, while the beats of the STOXX 600 (.STOXX) in Europe exceed the 60% so far, according to Refinitiv I / B / I / S data.

On Monday, Facebook (FB.O) will launch the profits of tech giants along with other heavyweights such as Microsoft (MSFT.O), Apple (AAPL.O) and Alphabet (GOOGL.O), and European financial giants and Asian from Deutsche Bank. (DBKGn.DE) at Lloyds (LLOY.L) will report later this week.

“Stock markets have faced a kitchen sink of worries – slower growth, rising costs and higher interest rates. However, corporate profits have more than offset these declines so far. in 2021, “said Marija Veitmane, senior strategist at State. World street markets.

“The peak of growth is clearly not a peak of income, as we have pointed out. “

Goldman Sachs strategists said net inflows to global equity funds were positive last week, with equity assets as a percentage of total assets currently at their highest level since at least 2010.

The largest MSCI global equity index (.MIWO00000PUS) stabilized below an early September high after posting eight consecutive sessions of gains, its longest winning streak since late May, according to data from Refinitiv.

DOLLAR GOING ESTABLISHMENTS

Strong corporate earnings have also held back the recent advance of the US dollar, even as money markets have advanced their expectations of political tightening.

The dollar index held near a one-month low at 93,483, broadly stable as hedge funds cut their long dollar positions for the second week in a row.

The more risky mood weighed on safe haven currencies like the yen, as did higher energy prices that supported currencies, particularly the Australian dollar and Canadian dollar.

Traders are awaiting third-quarter US GDP figures due Thursday, with flash readings of the Eurozone CPI for October also being a key indicator after the gauge hit a 2008 high last month.

Federal Reserve Chairman Jerome Powell said on Friday that the US central bank should begin the process of reducing its support for the economy by reducing its asset purchases, but is not yet expected to touch interest rates . Read more

As the decline looms, US benchmark yields rose and 10-year Treasury yields held below a five-month high of 1.7064% hit last week.

Oil prices rose further, with US crude reaching a seven-year high as global supply remained tight amid strong global demand. Brent crude rose 0.83% to $ 86.24 a barrel, while U.S. crude rose 0.80% to $ 84.51.

Spot gold rose 0.36% to $ 1,798 an ounce after posting gains over the past two weeks amid growing concerns about inflation and the weakening dollar.

Bitcoin, another asset often described as an inflation hedge, last stood at $ 62,000, up 3% after turbulent trading last week when it hit a new high of $ 67,016.

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Reporting by Saikat Chatterjee; Graphic by Danilo Masoni; Editing by Subhranshu Sahu and Mark Heinrich

Our Standards: Thomson Reuters Trust Principles.

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