Global shares approached record levels on Friday with the progress on the vaccine front and U.S. stimulus hopes. These encouraged bets on further normalization in the global economy. Meanwhile, the dollar and oil topped recent milestones.
An index of the world’s major 50 markets, MSCI ACWI, added 0.25% to 668.4. It came near a record high of 670.82 touched about two weeks ago, and its fifth consecutive day of gains.
In energy commodities, oil hit its highest level in a year, above $59 a barrel. Hopes of a quicker economic revival and supply curbs by OPEC and its allies kept it afloat.
Of Europe’s 600 largest stocks, the STOXX index was up 0.2% at 410.4. This is though slower vaccination rollout in continental Europe and disappointing industrial data from Germany tempered optimism.
The public’s expectations of a large stimulus by U.S. President Joe Biden also supported risk sentiment. Better-than-expected data on U.S. job markets fanned further hopes of a strong payroll report due at 1330 GMT. Data was released in the past two days.
U.S. Treasury Yields
Longer-term U.S. Treasury yields were up in anticipation of a large pandemic relief bill from Washington. Additionally, on heightening inflation expectations.
The benchmark 10-year yield stood at 1.130%, following its three-week high of 1.162% the previous day. Moreover, the 30-year bonds yielded 1.922%, near its 10 1/2-month high of 1.951% touched on Thursday.
In Europe, bond yields rose as well. The 30-year government bond yield of Germany climbed back into positive territory for the first time since September.
The country’s DAX index was unchanged after data showed that German-made goods fell more than expected in December.
MSCI’s gauge of Asian shares outside Japan gained 0.4% while Japan’s Nikkei rallied 1.5%.
Since October 2018, a market gauge of future U.S. inflation was at its highest. Since May 2019, a similar gauge for the eurozone was also hitting its highest.
It was a strong day for conventional assets. However, the leading names in the recent U.S. retail-share trading fad fared worse.
After two weeks of wild swings, the Reddit rally stocks GameStop (NYSE:GME) and AMC Entertainment (NYSE:AMC) plunged further. This came after two weeks of wild swings fuelled by the WallStreetBets Reddit forum.
Last week, deep-pocketed investors instead pumped a record $4.2 billion into big technology stocks. However, the BofA’s flow data showed, taking advantage of the slight pullback on Wall Street. Retail traders have plowed into the Reddit favorites.
