Global stocks remained close to record highs on Friday as strong US and Chinese economic data strengthened expectations for a solid global recovery from the coronavirus-induced decline.
European stocks are expected to be an inch higher, with Euro Stoxx futures up 0.1% and UK FTSE futures slightly higher.
MSCI’s widest global stock index (.MIWD00000PUS) reached 0.05% since the end of Asian trading, remaining slightly below the record on Thursday.
“Markets are looking forward to economic normalization as vaccines begin to circulate. Stock prices are likely to rise gradually, looking at future profits,” said Tomo Kinoshita, a global market strategist at Invesco Asset Management in Tokyo.
Asian markets were largely stable after China recorded record growth of 18.3% in the first quarter, although readings were slightly lower than expected, while retail sales jumped sharply last month. Read more
The data slightly changed the view that its rapid expansion is expected to slow later this year, as the government focuses on limiting financial risks in overheating parts of the economy.
“Regulators can make additional efforts to cool the real estate market and control domestic leverage. Fiscal discipline could also be tightened, which will slow local government funding and infrastructure investment,” said Chaoping Zhu, a global market strategist. at JP Morgan Asset Management in Shanghai.
US data for the night was also optimistic, with retail sales recovering 9.8% in March, pushing the sales level by 17.1% above its pre-pandemic level to a record high. Read more
The brightening economic outlook was highlighted by other data, including, for the first time, claims for unemployment benefits, which fell to their lowest level since March 2020 last week.
“The recovery in the United States looks really strong. And now that labor-intensive restaurants and hotels are reopening, we can see sharp pay gains next month,” said Koichi Fujishiro, a senior economist at Dai-ichi Life Research.
Despite strong data, US bond yields have fallen, in part from Japanese purchases, as they began a new fiscal year this month.
The yield on 10-year government securities fell to 1.529% on Thursday, the lowest level in five weeks and last reached 1.578%, compared to its 14-month high of 1.776% set at the end of March.
“The market has already fully appreciated the US economic recovery in the near future. And if the Federal Reserve keeps interest rates for the next two to three years, carrying US bonds will no doubt be very attractive compared to Japanese or eurozone bonds,” he said. Chotaro Morita, chief fixed income strategist at SMBC Nikko Securities.
The decline in the yield on long-term bonds favors stocks and especially technology stocks, given the idea that their historically expensive valuations may be justified, as investors will have no choice but to buy stocks to offset the low return on bonds. .
On the Wall Street, the S&P 500 (.SPX) advanced 1.11%, while the heavy Nasdaq Composite (.IXIC) technology added 1.31%, approaching its record high in February.
In the foreign exchange market, lower US yields were a slowdown in the US dollar.
The euro hit $ 1.1951, hitting a six-week high of $ 1.19935 overnight, while the US currency slipped to a three-week low of 108.61 yen and last traded at 108.89.
Gold also peaked at a seven-week high of $ 1,769 an ounce, most recently at $ 1,765.50.
Oil prices peaked at one month in forecasts of higher demand from the International Energy Agency (IEA) and OPEC, in addition to positive data for the United States and China.
Brent futures gained 0.6 percent to $ 67.37 a barrel, while crude oil in the United States rose 0.55 percent to 63.81 a barrel, both on the move for their first significant weekly gains of six.
Our standards: Thomson Reuters’ principles of trust.