Last week, global stocks were near record highs after positive economic data from the United States and China bolstered hopes of a strong global recovery from the COVID-19 -induced slump.
Euro Stoxx futures are expected to rise 0.1% while FTSE futures in the United Kingdom are expected to rise marginally. MSCI’s broadest index of Asia-Pacific stocks outside Japan was up 0.25%, with Shanghai stocks up 0.6%. The Nikkei 225 index in Japan increased by 0.1%.
MSCI’s broadest index of world stocks had risen 0.05%, remaining just below Thursday’s record high. Asia’s markets were mostly unchanged after China posted a new high of 18.3% growth in the first quarter, though the figure fell short of expectations, and retail sales rebounded strongly last month.
The data did little to shift the consensus that the economy’s rapid growth would slow later this year as the government focuses on reducing financial risks in overheated areas. Long-term bond yields fell, benefiting stocks, especially tech stocks, on the assumption that their historically high valuations could be justified because investors would have no choice but to buy shares to compensate for low bond returns.
On Wall Street, the S&P 500 gained 1.11% while the Nasdaq Composite gained 1.31% approaching its February high. Lower US yields were a drag on the US dollar in the currency market.
The euro was trading at $1.1951, having risen to a six-week high of $1.19935 overnight, while the dollar fell to a three-week low of 108.61 yen before closing at 108.89 yen. Higher demand forecasts from the International Energy Agency (IEA) and OPEC, as well as positive US and Chinese data, pushed oil prices to one-month highs. Brent futures were up 0.6% to $67.37 per barrel, while U.S. crude was up 0.55% to $63.81 per barrel, putting them on track for their first significant weekly gains in six weeks.
What this means:
- Asian stocks rose after China released data that was mostly in line with expectations.
- Bond prices in the United States are down as they have become more appealing.
- Markets anticipate a return to economic normalcy as vaccines are distributed. While anticipating upcoming earnings, stock prices are expected to increase steadily.
- The recovery in the United States appears to be very good. And now that restaurants and hotels, all of which employ a large number of people, are reopening, we will see a significant increase in payrolls in the coming month.