2023-11-30 21:59:39
The MSCI world stock index rose Thursday, while the Dow Jones closed at its highest level since mid-January 2022, and bond yields and the dollar advanced following Federal Reserve officials showed caution regarding the reduction of interest rates.
The U.S. Commerce Department said consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.2% last month, in line with economists’ expectations. The annual increase in inflation was the lowest in more than two and a half years, indicating a slowdown in demand.
U.S. Treasury yields climbed even following economic data provided more evidence that the Fed might halt rate hikes. After a sharp decline in recent weeks, the benchmark 10-year yield is on track to experience its biggest monthly decline since August 2011.
The dollar rose as investors took profits on bets of further weakening and ignored economic data suggesting the Fed may be done with rate hikes.
“Nearly all of the data released today was favorable for investors. Most importantly, we continue to see a deceleration in the Fed’s preferred measure of inflation, the core PCE price index,” Russell said Price, chief economist at Ameriprise Financial Services Inc. in Troy, Michigan. He added that this “should be a good thing for the Fed’s decision-making in future meetings.”
Although the closely watched U.S. inflation data was in line with economists’ expectations, some traders appear to have anticipated a slowdown in inflation, said John Augustine, chief investment officer at Huntington Private Bank.
“The market was expecting a negative surprise, a faster decline in inflation and a faster reduction in spending than consensus,” Mr. Augustine said.
Also Thursday, Fed policymakers delivered mixed messages as they pushed back once morest investors’ bets for a rapid cut in interest rates.
New York Fed President John Williams said that if price pressures and imbalances persist, “further policy tightening may be necessary.” As for San Francisco Fed President Mary Daly, she said she was considering whether policy was “restrictive enough to restore price stability” rather than rate cuts.
MSCI’s gauge of stocks in 47 countries rose 0.2%, on track for a 9% monthly gain, following three straight months of declines. That would be the largest monthly percentage increase since 2020, when investors reacted to early COVID-19 vaccine breakthroughs.
Earlier, the
pan-European STOXX 600 index
had closed up 0.55%, confirming its biggest monthly percentage rise since January, as weak economic data in Europe reinforced bets on rate cuts.
The Dow Jones Industrial Average was up 520.47 points, or 1.47 percent, at 35,950.89, the S&P 500 was up 17.22 points, or 0.38 percent, at 4,567.8 and The Nasdaq Composite Index lost 32.27 points, or 0.23%, to 14,226.22.
The Dow Jones, which is an index of 30 blue-chip U.S. stocks, hit its highest intraday level since the start of the year.
highest intraday level so far in 2023
and recorded its largest monthly percentage increase since October 2022. The biggest boost came from Salesforce Inc following releasing a strong quarterly report.
Yields on U.S. Treasuries and bonds of other major countries fell in November, following hitting more than decade highs in October. Yields on U.S. Treasury bonds, which generally determine global borrowing costs, saw their biggest decline since 2008.
On Thursday, benchmark 10-year bonds were up 7.1 basis points at 4.342%, up from 4.271% late Wednesday. The 30-year bond was up 5.8 basis points to yield 4.509%, while the 2-year note was up 5.5 basis points to yield 4.703%.
In terms of currencies, the dollar index rose 0.681%, the euro fell 0.76% to $1.0885.
The Japanese yen weakened 0.66% once morest the greenback, to 148.21 per dollar, while the pound sterling traded at $1.2624, down 0.55% on the day. .
In the energy sector, oil prices fell following OPEC+ producers agreed to a first-quarter oil production cut that fell short of expectations of the market.
US crude oil fell 2.44% to $75.96 a barrel and Brent crude finished at $82.83, down 0.32% on the day.
Gold prices fell on Thursday but eyed a second straight monthly rise as expectations the Fed might cut interest rates, boosting the appeal of yield-free bullion.
Spot gold fell 0.4% to $2,035.94 an ounce. U.S. gold futures fell 0.52% to $2,036.40 an ounce.
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