Global equities mixed, bond yields stable after Wall St pullout
BANGKOK (AP) – Global stocks were mixed on Friday after Wall Street pulled back from recent highs.
Benchmarks rose in Paris, Frankfurt, London and Hong Kong but fell in Tokyo, Sydney and Shanghai. US futures have gone up.
The yield on the 10-year Treasury bill was 1.34%. On Thursday, it fell to 1.30%, its lowest level since February. It was recently trading at 1.74%.
Traders have shifted money to bonds in recent weeks, driving down the benchmark yield, which is used to set the rates on mortgages and many other types of loans.
The German DAX jumped 1% to 15,566.88 and the CAC 40 in Paris jumped 1.8% to 6,510.77. In London, the FTSE 100 climbed 0.7% to 7,081.08.
The future of Dow industrials was 0.5% higher, while that of the S&P 500 rose 0.3%.
Investors are weighing the potential impact of COVID-19 variants hampering a resurgence in trade and travel, as governments in some countries reimpose precautions to tackle new outbreaks.
In Asian trade, Tokyo’s Nikkei 225 was down 0.6% to 27,940.42, while South Korea’s Kospi was down 1.1% to 3,217.95.
The Sydney S & P / ASX 200 was down 0.9% to 7,273.30, while the Shanghai Composite Index fell less than 0.1% to 3,524.09. Stocks also fell in India and Taiwan, but rose in Hong Kong, where the Hang Seng index gained 0.7% to 27,344.54.
Chinese consumer inflation fell to 1.1% year-on-year earlier in June from 1.3% the month before, after global commodity prices fell, the government reported. The increase in producer prices fell to 8.8% a year earlier, from 9% in May.
“All in all, concerns about price pressures in China are expected to ease over the next few months as inflation is likely to settle at a level unlikely to trigger monetary policy changes,” said Julian Evans-Pritchard and Sheana Yue of Capital Economics. in a comment.
Also on Friday, China’s central bank released more money for lending by reducing the amount of reserves that commercial banks are required to hold. The central bank said the move, announced earlier by the Cabinet, would lend an additional 1,000 billion yuan ($ 160 billion).
On Thursday, the S&P 500 fell 0.9% to 4,320.82, dragged down by a large drop driven mainly in technology, financial, industrial and communications companies.
The Dow Jones Industrial Average lost 0.7% to 34,421.93. The Nasdaq composite hit three-day closing highs, falling 0.7% to 14,559.78.
Small business shares also fell. The Russell 2000 Index slipped 0.9% to 2,231.68.
Long-term bond yields tend to move with investors’ expectations for inflation and economic growth. The sharp drop in long-term bond yields could also be attributed to the fact that investors quickly reversed bets that they would continue to rise as the economy continues its strong recovery.
Investors are increasingly nervous about potential measures by central banks, especially the US Federal Reserve, to end lavish support for markets that collapsed at the start of the pandemic.
Investors will turn their attention to corporate earnings from next week, when big banks like JPMorgan Chase, Goldman Sachs and Bank of America report their results. Banks tend to be a proxy for the overall economy, so investors will carefully analyze reports and listen to what banks say about the state of lending and spending as the recovery continues.
Benchmark US crude oil gained 88 cents to $ 73.82 a barrel in electronic trading on the New York Mercantile Exchange. It gained 74 cents in the previous session, at $ 72.94 a barrel. Brent crude, the standard for international prices, added 72 cents to $ 74.84 a barrel.
The US dollar rose from 109.75 yen to 110.05 Japanese yen. The euro strengthened to $ 1.1851 from $ 1.1846.
AP Business Writer Joe McDonald contributed from Beijing.