Equities Edge Higher But Political Concerns Weigh On Sentiment

22Views

September 11, 2020

NEW YORK: Global equities and U.S. government bonds edged higher Friday as investors weighed better-than-expected corporate earnings and increased M&A activity in Europe against political concerns ranging from November’s U.S. elections to Brexit.

Growing fears over a messy no-deal Brexit dragged sterling to new 5-1/2-month lows after the European Union told Britain it should urgently scrap a plan to break their divorce treaty.

“Most of the risks faced by markets for the rest of the year are political, so around the U.S. election, the UK government’s exit from the EU and U.S.-China tensions,” said Francois Savary, chief investment officer at Swiss wealth manager Prime Partners.

“As people take a step back to assess these risks, we’re in this consolidation, holding pattern, which was needed as markets aren’t cheap at the moment.”

MSCI’s gauge of stocks across the globe gained 0.45% following modest gains in Europe and Asia. Japan’s Nikkei rose after Tokyo dropped its coronavirus alert by one notch from the highest level as COVID-19 cases trend down.

European indexes were bolstered after telecoms and cable group Altice Europe said its founder had offered to take the company private, sending its shares up more than 24%.

In morning trading on Wall Street, the Dow Jones Industrial Average rose 153.71 points, or 0.56%, to 27,688.29, the S&P 500 gained 23.02 points, or 0.69%, to 3,362.21 and the Nasdaq Composite added 103.22 points, or 0.95%, to 11,022.82

Shares of cloud services company Oracle Corp and exercise bike maker Peloton Interactive Co both jumped after better-than-expected earnings.

The NYSE Fang+ index of big 10 tech companies has lost 5.4% so far this week – its biggest weekly loss since the market turmoil in March if sustained by the end of Friday.

Still, the index has more than doubled from its March trough, and investors have gathered that high valuations are justifiable in light of near-zero interest rates in much of the developed world and massive liquidity the world’s central banks have created.

Many investors have said the sell-off was a healthy correction.

Yet, with the world’s stocks still trading near the most expensive levels relative to the profit outlook since the 2000 tech bubble, some analysts called for caution.

“Global shares had rallied on expectations of economic recovery from lockdowns. But as the autumn begins (in the northern hemisphere), people wonder if coronavirus infections could worsen,” said Kozo Koide, chief economist at Asset Management One.

In currency markets, the British pound was set for its worst week against the euro and the dollar since mid-March. On Friday it was down 0.1% against the euro at 0.9285 pence and 0.2% to the dollar to $1.2825.

The European Union is ramping up preparations for a tumultuous end to the four-year Brexit saga after Britain explicitly said this week it plans to break international law by breaching parts of the Withdrawal Agreement treaty signed in January.

The dollar index fell 0.106%, with the euro up 0.3% to $1.1848.

Benchmark 10-year notes last rose 2/32 in price to yield 0.6772%, from 0.684% late on Thursday

Oil prices were under pressure from a surprise rise in U.S. stockpiles and weak demand due to the coronavirus pandemic.

U.S. crude recently fell 0.4% to $37.15 per barrel and Brent was at $39.64, down 1.05% on the day.

Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor

Equities Edge Higher But Political Concerns Weigh On Sentiment

Speak Your Mind

LEAVE A REPLY Cancel reply

Get in Touch

Recommend for You

Oh hi there It’s nice to meet you.

Subscribe and receive our weekly newsletter packed with awesome articles that really matters to you!

You might also like

EDITOR PICKS

POPULAR POSTS

POPULAR CATEGORY

About Us

Follow Us

Support Us & Be a Patreon

Add QNewsHub to your Homescreen!

Oh hi there
It’s nice to meet you.