NEW YORK: Global stock markets hit new record highs on Friday, boosted by predicted corporate earnings, but dollar and Treasury yields fell in early August following data on declining US consumer confidence.
A University of Michigan survey showed consumer confidence falling to its lowest level since 2011 in the first half of this month. The decline marked one of the six biggest drops in the last 50 years of the survey.
The unexpectedly weak reading could give Federal Reserve policymakers reason to pause on the decision whether to start
Is pulling back the extraordinary stimulus it took to protect the US economy from the COVID-19 pandemic.
Andrew Hunter, an economist at Capital Economics, said the “renewal suggests that the latest wave of virus cases, driven by delta variants, could be a major strain on the economy.”
Pandemic-era excitement has been behind a huge jump in stock prices over the past year, but massive corporate earnings growth in recent weeks has given the rally new legs.
“If we look at the earnings trajectory, it still gives a lot of support for valuations in the market,” said Yung-Yu Ma, chief investment strategist at BMO Wealth Management. “Earnings season provided some comfort and stability.”
The MSCI World Equity Index, which tracks stocks in 50 countries, hit a new record high.
The worldwide gauge of MSCI shares rose 0.13%.
The S&P 500 also hit new record highs. Walt Disney was a star performer, with his after-market earnings climb of 1.43% in forecasts.
The Dow Jones Industrial Average fell 8.02 points, or 0.02%, to 35,491.83, the S&P 500 rose 2.21 points, or 0.05%, to 4,463.04, and the Nasdaq Composite fell 11.69 points, or 0.08%, to 14,804.58.
European stocks hit new highs and saw their fourth consecutive week of gains on optimism in a strong earnings season and a steady recovery from the pandemic-led economic slowdown.
The pan-European STOXX 600 index rose 0.2% to a record high of 476.16 for the tenth consecutive session. The index has now matched its best winning streak since December 2006.
However, not everyone is convinced that the rally can continue.
Paul O’Connor, Head of Multi-Asset at Janus Henderson, said: “We feel a little more cautious on the health front, the uncertainty on the Chinese regulatory front and the monetary policy front.”
Gold rose over 1% as bearish worries eased.
Spot gold rose 1.5% to $1,777.91 an ounce.
US gold futures were up 1.5% at $1,778.20.
The dollar and the US benchmark 10-year Treasury yield weakened after the Consumer Confidence Survey, boosting gold’s appeal.
The dollar index fell 0.491%, the euro rose 0.56% to $1.1793.
The benchmark 10-year note last rose 21/32 in price to 1.2985%, up from 1.367% late Thursday.
Concerns about regulatory action in China and a surge in the COVID-19 delta variant have dampened confidence in Asia, where markets have mostly fallen.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.56%, and was 0.8% lower for the week.
Chinese blue chips weakened 0.55%, dragged down by its local semiconductor sub-index, which fell 4.1%.
Oil fell on Friday but was on track to post little weekly gains, largely belittling a warning from the International Energy Agency that the spread of the coronavirus variant is slowing oil demand.
US crude futures were down 65 cents, or 0.94%, at $68.44 a barrel. Brent crude futures were down 72 cents, or 1%, at $70.59 a barrel.
(Additional reporting by Evan Sully and Lindsay Dunsmuir; Editing by Jonathan Otis and David Evans)
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