Global stocks traded around record levels Friday after a Wall Street rally on Federal Reserve Chairman Jerome Powell’s assurance that the central bank can reinvigorate the economy without stoking painful inflation.
Concerns about price pressures were apparent in China, where data showed the fastest factory inflation since 2018. Sliding Chinese stocks weighed on an Asia-Pacific share gauge. U.S. equity futures climbed, with Nasdaq 100 contracts outperforming, after the S&P 500 notched an all-time high amid low volumes on U.S. exchanges. European equity futures fluctuated.
Powell’s assurance boosted Treasuries, with the benchmark yield around a two-week low. Treasury 20-year bonds led the broader gains after comments from New York Fed Executive Vice President Lorie Logan sparked talk of increased central-bank purchases in this maturity. The dollar held losses, putting its three-week winning streak at risk.
Oil edged up toward $60 a barrel as Saudi Arabia defended the OPEC+ plan to boost output, and said the alliance can change course if needed.
The Fed commentary is reassuring investors of the central bank’s commitment to dovish policy that fosters a sustainable rebound from the health crisis. Powell said policy makers would react if inflation expectations started “moving persistently and materially” above tolerable levels. Despite the strength of some indicators, the recovery remains incomplete, as reflected in the latest unexpectedly high U.S. jobless claims.
“A lot of investors are worried about the stock market highs, but that doesn’t mean it can’t get higher, and the economic conditions are certainly set up for a positive equity environment,” said Xi Qiao, managing director at UBS Global Wealth Management, on Bloomberg TV.
The U.S. outlook is greatly improved, but remains at risk from potential setbacks in the global economy as the vaccine rollout “hasn’t been nearly as robust in many countries,” San Francisco Fed President Mary Daly said in a Bloomberg interview.
More than 704 million shots have been administered worldwide, but uncertainty over risks associated with the AstraZeneca vaccine has slowed the process in some countries. China is among those facing fresh hurdles as its effort to vaccinate 560 million people by the end of June runs into a supply shortage.
These are some of the main moves in markets:
- S&P 500 futures were up 0.2% as of 5 a.m. in London. The S&P 500 closed 0.4% higher.
- Nasdaq 100 futures rose 0.4% after the index gained 1%.
- Japan’s Topix Index was up 0.6%.
- South Korea’s Kospi Index shed 0.1%.
- Australia’s S&P/ASX 200 Index was 0.4% lower.
- Hong Kong’s Hang Seng Index lost 0.7%.
- China’s Shanghai Composite Index fell 0.7%.
- The Bloomberg Dollar Spot Index rose less than 0.1%.
- The euro slipped 0.1% to $1.1907.
- The Japanese yen traded at 109.29 per dollar.
- The yield on 10-year Treasuries rose a basis point to 1.63%.
- Australia’s 10-year bond yield was steady around 1.74%.
- West Texas Intermediate crude climbed 0.2% to $59.71.
- Gold was 0.1% lower at about $1,753 an ounce.
— With assistance by Nancy Moran, Elena Popina, Edward Bolingbroke, and Kathleen Hays