MILAN (Reuters) – Global stocks hit new highs on Monday on betting, interest rates will remain low and the economy will continue to recover, as oil prices have jumped after a cyberattack on a US pipeline operator in the bewildered markets.
MSCI’s stock gauge across the world hit a new high and rose 0.1% at 7:40 a.m. GMT, driven by gains in Asian markets overnight and a steady open in Europe.
The European regional STOXX 600 index rose 0.1% in initial trades, while the largest MSCI index of Asia-Pacific stocks outside of Japan rose 0.4%. S&P 500 futures were flat while Nasdaq futures fell 0.5%.
Non-farm payroll data in the United States on Friday showed job growth slowed much more than expected in April in a shock release that gave stocks a boost but put pressure on the downside on dollar and US Treasury yields.
“A statistical fluke and / or a temporary pause in labor market demand is the most likely culprit in this report. However, the Federal Reserve cannot afford to adjust its policy without concrete evidence of a stronger recovery in the labor market, ”said Natixis economist Troy Ludtka.
The Dow Jones Industrial Average and S&P 500 hit record closing highs on Friday as disappointing U.S. job market data allayed concerns about soaring consumer prices.
In recent weeks, some investors had bet that a solid US economic recovery from the coronavirus pandemic would force the Federal Reserve to tighten policy sooner than the central bank had indicated.
However, the weakness of the non-farm payroll report caused a rapid reversal in some of these trades, which spilled over into stocks, bonds and major currencies.
US President Joe Biden said after the report that the numbers showed the economy was not at risk of overheating and underscored how vital his administration’s economic actions were.
“At the end of the day, it’s the best of all possible worlds for stocks: a strong economy, strong earnings, but no tightening monetary policy and more budget spending to come,” said Giuseppe Sersale, fund manager at Anthilia in Milan.
The focus is now on US consumer price data, due Wednesday, which will help investors determine whether they need to lower their inflation expectations further.
The dollar index against a basket of six major currencies edged up 0.17% to 90.301, but was just above its lowest since the February 25 hit earlier in the session.
The British pound jumped to its highest for more than two months against the greenback, but traders said concerns over Scottish independence could dampen the gains of the British pound. It was the latest 0.5% increase to $ 1.406.
In the cryptocurrency market, ether rose 5% to a new high above $ 4,000. The biggest rival bitcoin rose 1% to $ 58,862.
The benchmark 10-year Treasury yield added about 1 basis point to 1.597% after plunging to a two-month low of 1.469% on Friday.
Oil prices have risen after a cyberattack terminated a U.S. pipeline operator that supplies nearly half of the fuel supply to the U.S. east coast. [O/R]
Brent rose 0.5% to $ 68.64 per barrel as the disruption in U.S. supplies rocked energy markets, while U.S. crude rose 0.5% to $ 65.23 per barrel. barrel.
On Sunday, the White House was working closely with the main U.S. fuel pipeline operator Colonial Pipeline to help it recover from a ransomware attack that forced the company to shut down its main fuel lines.
Copper prices have reached record highs with hopes of improving demand amid tightening supply. Three-month copper on the London Metal Exchange rose to $ 10,747.50 per tonne earlier in the session before falling slightly.
Reporting by Danilo Masoni in Milan and Stanley White in Tokyo; edited by Emelia Sithole-Matarise