GLOBAL EQUITY WITNESSED ANOTHER BUMPER WEEK
Global stock markets hit new record highs on Friday, capping another bumper week as investors seized on a dip in U.S. inflation and more forecast-beating corporate earnings.
U.S. inflation numbers this week suggested rising price growth may be peaking, which would ease pressure on the Federal Reserve to begin tapering its asset purchases. Inflation data as consistent with the Federal Reserve’s view that price pressures will start to fade and do not justify an early withdrawal of monetary stimulus. Pandemic-era stimulus has been behind much of the surge in stock prices the past year, but a stronger than expected economic rebound across the world and massive corporate earnings have given the rally new legs in recent weeks.
The Dow Jones and the S&P 500 hit new records on Friday, and were on track for a second straight week of gains as investors welcomed strong earnings results, upbeat labor market data and the Senate's passage of a massive infrastructure bill. On the corporate front, Walt Disney's quarterly earnings topped expectations as its streaming services picked up more customers than expected and its theme parks returned to profitability. Meanwhile, Airbnb signaled weak current-quarter bookings due to the Delta variant of the coronavirus; while DoorDash's loss widened more than expected in the second quarter. Activision Blizzard rose after Citigroup upgraded the video game publisher's stock to "buy" from "neutral". Investors now await the minutes of the Fed's latest policy meeting due next week for policy cues, following the release of mixed inflation data earlier this week. So far this week, the Dow and the S&P 500 have gained 0.8% and 0.5% respectively, while the Nasdaq lost 0.1%.
European equities rose for the tenth session on Friday, with the pan-European STOXX 600 notching a fresh record high and recording its fourth consecutive week of gains. Gains were once again most pronounced in those economically sensitive stocks of the market, with sentiment dominated by a strong earnings season and the prospect of a solid economic recovery in Europe helped by continued support from central banks. The benchmark DAX 30 finished near the 16,000-level to end the week on a high note.
The Baltic Dry Index surged about 2% to 3,566 on Friday, its highest level since mid-2010 and extending gains for a fourth straight session, helped by improving demand, congestion in Chinese ports, and weather concerns in the Pacific. The capesize index, which tracks iron ore and coal cargos of 150,000-tonnes advanced 3.4% to a four-month high at 4,766; and the panamax index which tracks cargoes of about 60,000 to 70,000 tonnes of coal and grains, increased 0.5% to 3,566 a peak since July 21 at 3,566. Among smaller vessel, the supramax index rose about 19 points to a fresh all-time high of 3,098. The Baltic Dry Index posted a 5.8% gain for the week.
MSCI’s gauge of stocks across the globe gained 0.02%. Worries about a regulatory crackdown in China and a surge in the COVID-19 Delta variant have sapped confidence in Asia, where markets mostly declined. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.56%, and was 0.8% lower for the week. Chinese blue chips weakened 0.55%, dragged down by its local semiconductor sub-index, which slumped 4.1%. SENSEX closed at 1.08% gain today.
The dollar stayed close to its highest level in four months against a basket of currencies as investors looked for more hints from the Fed on its plans to reduce monetary stimulus. The dollar index fell 0.227%, with the euro up 0.32% to $1.1765.Benchmark 10-year notes last rose 8/32 in price to yield 1.3405%, from 1.367% late on Thursday. U.S. crude recently fell 0.07% to $69.04 per barrel and Brent was at $71.21, down 0.14% on the day.
