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Investors excited about global equities: betting big on a rate cut

Investors excited about global equities: betting big on a rate cut

The global stock indices register increases, while the yields of the Treasury bonds fell on Friday, driven by weaker-than-expected US data. This data reinforces investors’ expectations that the Federal Reserve will reduce interest rates in the coming months.

The Institute for Supply Management (ISM) reported that its manufacturing PMI decreased to 47.8 last month from 49.1 in January. This marks the 16th consecutive month that the PMI has remained below 50, indicating a contraction in the manufacturing sector.

The Nasdaq continues its advance a day after closing at all-time highsdriven by gains in AI-linked stocks such as chip designer Nvidia and others.

On Wall Street, The Dow Jones Industrial Average rose 37.71 points, or 0.10%, to 39,035.19 units; the index S&P 500 gained 19.22 points, or 0.38%, to 5,115.49; and the Nasdaq Composite improved 81.28 points, or 0.5%, to 16,171.95 units.

What data does the market observe?

Globally, the MSCI world equity index rose 3.9 points, or 0.51%, to 765.18 units; the pan-European STOXX 600 rose 0.6%, and the Japanese Nikkei gained 1.9%, reaching a new all-time high.

In the cryptocurrency space, Bitcoin was trading just below its more than two-year high reached on Wednesday. In its last quote, it advanced 0.7%, to $61,840, after touching $63,933 on Wednesday, its highest since November 2021.

The dollar appreciated against the yen after Bank of Japan Governor Kazuo Ueda mentioned that it was too early to declare victory over inflation. However, the greenback fell against the euro.

In terms of commodities, crude oil prices improved by around 1.5%, while spot gold gained 0.71%, reaching $2,057.79 per ounce. The yield on 10-year bonds fell 6.8 basis points to 4.184%, and that on two-year notes, which typically moves in step with rate expectations, fell 11.5 basis points to 4.184%. 4.5313%.

Source: Ambito

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