GLOBAL MARKETS – Global stocks advance on hopes of US jobs data
(Add market close, context, quote)
* Indices: Dow up 0.07%, S&P up 0.14%, Nasdaq up 0.14%
* AMC’s stock rally sets record
* Investors are monitoring the recovery of the labor market after the fall in employment in April
* Big Data week drives inflation apathy
* Chart: Global Asset Performance http://tmsnrt.rs/2yaDPgn
* Chart: world exchange rates http://tmsnrt.rs/2egbfVh
By Katanga Johnson
WASHINGTON, June 2 (Reuters) – Global equity markets strengthened on Wednesday ahead of key US economic data expected later in the week as investors weighed in on inflation concerns and a new surge in “memes stocks”.
Oil prices hit their highest level in more than a year following a decision by OPEC and its allies to stick to the plan to gradually restore supply, as well as slow nuclear negotiations between Iran and the United States.
Major Wall Street indexes ended the session mixed after erasing earlier gains around midday, dragged down by a surge in shares of AMC Entertainment Holdings, which nearly doubled in price on Wednesday.
This breathtaking rally saw shares of the movie chain operator close up 95.2% at $ 62.55, a new record, which affected a group of preferred shares by retail investors on forums. such as Reddit’s WallStreetBets.
It comes as suspicious investors are still not convinced by assurances from the central bank that the current inflationary surge is transitory.
The pan-European STOXX 600 index rose 0.28% and MSCI’s stock gauge, which tracks stocks in 50 countries, gained 0.09%.
Markets are less influenced by fundamentals than at any time in recent memory, said Howard Fischer, partner at the law firm Moses & Singer.
As the ‘same stock’ frenzy continues, the apparent disconnect between asset values and asset prices continues to widen. Predictions that prices and inherent value will eventually converge have, until now, revealed to be unfounded. ”
The US Federal Reserve will begin unwinding holdings of corporate bonds it acquired last year with an emergency lending facility launched to calm credit markets at the height of the pandemic, the bank said on Wednesday central.
Central bank officials said in its Beige Book report released earlier Wednesday that the U.S. recovery has accelerated in recent weeks even as a long list of supply chain issues, hiring difficulties and price increase was reflected in the country.
It comes after a sharp expansion in European and US factory activity in May lifted global stocks to record highs on Tuesday.
A weekly unemployment report and May private wage data on Thursday will be followed by monthly employment figures on Friday, as investors look for signs of an economic rebound and rising inflation.
Yet ahead of crucial Friday’s US employment data, traders eagerly aim to assess what growing evidence of a faster-than-expected economic recovery would mean for central bank policy in Europe and the states. -United.
The Dow Jones Industrial Average rose 25.07 points, or 0.07%, to 34,600.38, the S&P 500 gained 6.08 points, or 0.14%, to 4,208.12 and the Nasdaq Composite added 19.85 points, or 0.14%, to 13,756.33.
Investors are already stuck in the summer slump with markets struggling to find direction as most of the good economic news is reflected in, said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina .
Inflation and job growth will continue to be debated, he said.
“With the Fed and many bond market investors confident that the price increases will remain temporary… others will take a more skeptical eye on the conversation.”
Brent rose $ 1.1, or 1.6%, to $ 71.35 a barrel. It hit $ 71.48 per barrel, its highest since January 2020.
U.S. West Texas Intermediate (WTI) crude rose $ 1.11, or 1.6%, to $ 68.83 a barrel. It hit $ 69.00 during the session, its highest since October 2018.
Crude oil inventories fell last week as fuel inventories rose, two market sources said, citing figures from the American Petroleum Institute on Wednesday.
As broad stock markets remain near record highs, the momentum at the start of the year has run out of steam as investors begin to worry about a stronger-than-expected rebound in COVID-19 means a higher inflation and a tightening of monetary policy sooner than expected.
Economies are recovering much faster than expected – data on Wednesday showed Australia’s economy accelerated in the last quarter as consumers and businesses abandoned spending, pushing output back above what it was was last year before the pandemic.
IGNORE INFLATION DATA
As investors have built significant shorts against the US dollar more broadly, they are worried about a possible hawkish tone from the Fed at its meeting later in June, and traders are reluctant to send the note. green much lower.
The 10-year benchmark notes last rose 8/32 to return 1.5892%, from 1.615%.
Eurozone yields largely ignored Tuesday’s data showing Eurozone inflation hit 2% in May – a sign that markets were confident the European Central Bank would not decide to slow the pace of its bond purchases at its June 10 meeting.
“Keep a close eye on the 10-year US Treasury note – as long as rates stay below 2% per cent, relative calm should reign in the stock markets, but a sharp rise in rates could cause a more violent rotation of technology. and communications and finance and documents services, ”added Zaccarelli of the Independent Advisor Alliance.
But Patrick Leary, who is chief markets strategist and senior trader at Incapital in Minneapolis, said he sees a lot of uncertainty about inflation.
“The Fed keeps saying that inflation will be transient, and, for now, the markets are comfortable with that narrative,” Leary said, adding that he considers the central bank “to be trying. intentionally overheating the economy to lower employment. Unfortunately, this will also lead to inflation. ”
(Reporting by Katanga Johnson in Washington; Additional reporting by Herbert Lash in New York Editing by Nick Macfie, Aurora Ellis and Jonathan Oatis)