Stocks rise, bond yields too – despite central bankers’ whistleblowing efforts

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In this news, we discuss the Stocks rise, bond yields too – despite central bankers’ whistleblowing efforts

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LONDON (Reuters) – Global stocks returned to record highs on their third day of gains on Thursday as the dollar fell to a three-year low, after senior Federal Reserve and European Central Bank officials tried to reduce the rise in bond yields.

There was a lot to watch out for. A renewed retail frenzy has reignited the likes of GameStop, bets on $ 70 a barrel of oil and a nearly ten-year copper price rallying commodity currencies. [/FRX] – and despite all the talk from the central bank, bond yields were still rising.

The MSCI Global Stock Index, which covers 50 countries, rose 0.45% after gains in Asia and a decent morning in Europe where oil and gas stocks jumped 2%, but things were starting to turn out. bumpy.

Nasdaq futures fell 1% on Wall Street. The index has fallen for seven of the past eight days as investors ditched super-charged tech and internet stocks that surged when COVID-19 forced people to stay home.

Apple, Amazon, Microsoft, Facebook and Netflix were all down between 0.9% and 1.3% before the bell.

“There are now two clear stories,” said Michael Hewson, senior analyst at CMC Markets. “You have concerns about rising yields, and they continue to rise today, and then you have a story of an economic recovery, which is helping push up the more moderately valued segments of the market.”

Federal Reserve Chairman Jerome Powell on Wednesday said U.S. rates could stay low for years and Isabel Schnabel, a member of the ECB’s board, said on Thursday the bank would fight any sharp rate hikes market adjusted for inflation.

“Too sharp an increase in real interest rates due to improved global growth prospects could jeopardize economic recovery,” she said. “Therefore, we are closely monitoring developments in the financial markets.”

But the bond markets weren’t playing the ball. Benchmark German Bund yields climbed 4 basis points and 10-year US Treasury yields hit 1.45% and their biggest monthly increase since Donald Trump won the US election in late 2016.

The focus will be on the Department of Labor’s weekly jobless claims report, which is expected to show fewer Americans filed new jobless claims last week.

In forex markets, the safe haven index of the US dollar fell to a three-year low as the Fed’s stance, ongoing progress with COVID vaccination programs and the surge in the commodity market have rather boosted the riskier currencies. [/FRX]

The Australian and Canadian dollars both hit three-year highs of C $ 0.7980 and C $ 1.2477 per US dollar respectively.

The euro also hit a six-week high at $ 1.2235, while the yen and Swiss franc weakened.

“It’s pretty clear that there is a high concentration in commodity currencies,” said John Hardy of Saxo Bank. “Even with emerging markets, you see it to a certain extent,” he added, noting how big energy importers like the Turkish lira have vanished.

(Graphic: commodity currencies on the load 🙂

MARATHON NOT A SPRINT

Brent oil climbed to 13-month high of $ 67.30 after US government data Wednesday showed a drop in crude production as a deep freeze in Texas disrupted production last week. [O/R]

Copper prices have risen to over $ 9,500 per tonne in London. The key industrial metal is now at its highest level in nearly a decade and could post its biggest monthly gains in 15 years this month.

In a possible sign of a resurgence of the retail-driven stock market frenzy, GameStop’s Frankfurt-listed shares tripled when they opened on Thursday, outpacing the video game retailer’s 100% surge on Wall Street. overnight.

Other so-called “stonks” – an intentional misspelling of “stocks” – preferred by retail traders on sites such as Reddit’s WallStreetBets had also jumped again, although explanations for the moves were tenuous.

Some online stock watchers had even pointed to a photo posted by a GameStop activist investor of a McDonald’s ice cream cone with a frog emoji as a cryptic sign.

“It’s a marathon, not a sprint. Whatever happens, resist the urge to sell. The longer you hold on, the higher it goes, ”@ catchme1fyoucan, a user in Italy of the eToro retail platform, said in a discussion on GameStop.

Reporting by Marc Jones, editing by Larry King and Hugh Lawson

Original © Thomson Reuters

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