Stocks from around the world made a valiant comeback as commodities continued to slide. This energetic rally was fueled by rebounding technology stocks along with fresh optimism in China & Europe. The euro & dollar held steady as the yen suffered a slight loss. Global equities are on the rebound as trading volumes reached their highest levels since mid-March. Growing skepticism of the Federal Reserve’s trajectory is keeping bond yields low in the face of lower levels of inflation. This is the beginning of another interesting week, so let’s dive into the details!
International Stocks Soar While Commodities Slip
As political tensions die down, stocks around the world are on the rise. The Stoxx Europe 600 achieved a surprise jump that put them on track for the highest gains since April. Rising banking shares helped the once struggling index to gain 0.8%. This impressive comeback came on the heels of their 0.5% loss last week. At the end of the day, the European stocks keep surprising investors.
Not to be outdone, Asian stocks joined the recovery. The MSCI Asia Pacific Index rose by 0.5% after being emboldened by increased tech shares. Out of all the Asian tech giants, Samsung led the way with a 2.2% comeback. Foxconn Technology Co. also enjoyed a 6% increase, their biggest rally since September. Tencent Holdings Ltd managed to pair their 1.7% loss from last week with a sudden 1.7% climb. Japan’s Topix Index also rose by 0.6%, slightly easing concerns about their president’s current political scandal.
These were all valiant recoveries, but the surprises were far from over in Asia. Hong Kong’s Hang Seng Index rose by 1.2% after suffering its first weekly decline in 6 weeks. This growing optimism was felt across Chinese stocks, with the Hang Seng China Enterprises Index enjoying a 1.5% increase. This was their biggest rally since May 25th, which was welcome news to investors. The Shanghai Composite also advanced 0.7%, showcasing the bullish tone in the Chinese market.
American stocks also surprised experts after exceeding growth expectations with a sudden advance. Futures on the S&P 500 Index enjoyed a 0.3% raise, dwarfing predictions of a 0.1% increase. All this came on the heels of investors blasting the Federal Reserve’s trajectory for monetary tightening. Trading volumes may be high, but poor housing data is casting doubts on the American economy’s growth rate.
Most currencies held their ground, while the yen took the biggest loss. Despite growing concerns about Trump, the Bloomberg Dollar Spot Index held steady with less than a 0.1% increase. The pound remained flat at $1.2783 as Britain finally started negotiating its divorce from the European Union. The euro was unchanged as French President Emmanuel Macron’s party won majority by a landslide. Despite recent advances, the yen still declined 0.2% to 111.12 per dollar.
Out of all the sectors, commodities had a rough week. West Texas Intermediate crude oil lost 0.5%, putting it at $44.54 a barrel. This dismal figure is the lowest level since November. Gold also shuddered with a 0.1% loss. This left it at $1,251.95 an ounce, cementing its 8th decline in 9 sessions.
As stocks enjoy a banner week, investors are setting their sights on the future. The losses experienced by commodities are no surprise, since something has to give. Global equities are remaining strong, & most political fanfare is finally dying down. There’s a growing sentiment of optimism, which will lead the way into this week. Only time will tell how long these rallies will last.