European and US stocks mostly rose on Monday on optimism over growing economic momentum, but fell in Asia as investors weighed down the risk of inflation there as the global economy recovered from the coronavirus pandemic .
With London, Tokyo and Shanghai shutting down for the holidays, traders diverged over corporate results and US employment figures later this week.
John Williams, chairman of the New York branch of the Federal Reserve, predicted that the US economy would grow 7% this year as it rebounded from the Covid-19 pandemic, its fastest rate since the start from the 1980s.
Williams also sent another conciliatory signal on monetary policy, saying the world’s largest economy “still has a long way to go” and needs to see several months of strong job growth to achieve a full recovery. .
But earlier, investment giant Warren Buffett instilled some unease after saying over the weekend that he expected the US economy to be in “high gear” thanks to the massive support. from the Federal Reserve and the government, but that would fuel inflation.
“People have money in their pocket and they pay higher prices,” he said, and there has been more inflation than expected six months ago.
Concerns over a sudden rise in prices pose a challenge for stocks in the coming period, even as investors remain broadly optimistic about improving economic conditions in the United States.
Markets are also watching the coronavirus crisis in India, where there have been around 20 million cases, overwhelming much of the country’s healthcare system.
Still, the Dow and S&P 500 ended with gains, although the Nasdaq sagged.
Paris and Frankfurt ended the day higher.
But Hong Kong and Singapore lost more than one percent, while Taipei lost two percent. There were also losses in Seoul, Mumbai and Jakarta although Wellington is on the rise. Sydney and Manila were flat.
The losses came despite data showing higher-than-expected jumps in factory activity in Australia, Indonesia, Malaysia and Taiwan.
“Traders believe it is very likely that the global stock market, especially the US stock, could face a correction, as we have seen three consecutive months of gains,” said Naeem Aslam, market analyst in chef at AvaTrade.
Investors are also concerned about the growing number of Covid cases in India and how this could affect the global economy, Aslam said.
Traders will be watching closely for the release of US employment data this week, which will provide the latest snapshot of the world’s largest economy and its recovery.
Oil prices have risen, recovering some of the ground after the roughly 2% declines they suffered on Friday over fears the frightening coronavirus outbreak in India could hit demand from the huge economy.
New York – Dow: + 0.7% to 34,113.23 (close)
New York – S&P 500: + 0.3% at 4,192.66 (closing)
New York – Nasdaq: Down 0.5% to 13,895.24 (close)
London – FTSE 100: closed for holidays
Frankfurt – DAX 30: + 0.7% to 15,236.47 (closing)
Paris – CAC 40: + 0.6% at 6,307.90 (closing)
EURO STOXX 50: + 0.6% at 4000.25 (closing)
Hong Kong – Hang Seng Index: down 1.3% to 28,357.54 (close)
Tokyo – Nikkei 225: closed for holidays
Shanghai – Composite: closed for holidays
Euro / dollar: UP to $ 1.2066 from $ 1.2020 at 9:00 p.m. GMT
Pound / dollar: UP to $ 1.3907 from $ 1.3822
Euro / pound: LOW 86.71 pence from 87.01 pence
Dollar / yen: LOW at 109.07 yen vs. 109.31 yen
North Sea Brent: + 1.2% to $ 67.56 per barrel
West Texas Intermediate: + 1.4% to $ 64.49 per barrel
– Bloomberg News contributed to this story –