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Stocks rise for third day on hopes of US soft landing: Markets end


(Bloomberg) – Global stocks rose for a third day and the dollar slipped, as better-than-expected US consumer confidence data and China’s renewed commitment to prioritizing economic growth drew many investors return to stocks and other risky assets.

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Europe’s Stoxx 600 equity gauge opened 0.4% higher, while US futures rose after the underlying S&P 500 and Nasdaq 100 index rose 1.5%. Wednesday’s data showed US consumer confidence at an eight-month high.

“The resilience of the US economy continues to impress, and the possibility of a gentle landing is a small step,” analysts at SEB in Stockholm told clients. Buy stocks whenever there is a chance.

They note that the S&P 500 is down nearly 5% this month, contrasting with an average 1.5% gain in December since 1950.

Read more: Stock bulls hunt for their worst rare December breakout since ’18

The latest gains came as trading began to close for the year, Federal Reserve speakers were quiet and some positive data and earnings prints emerged. Dust is also addressing the Bank of Japan’s sudden hawkish pivot on Tuesday, when it decided to double the upper limit of tradable bonds on 10-year debt.

Traders will likely continue to test the BOJ’s new 0.5% yield cap, and the central bank has launched an additional debt purchase, pushing yields down around 0.385%. However, 10-year borrowing costs are on track for their biggest weekly rise since 2015.

Globally, yields on Treasuries and euro zone bonds fell but there are still concerns that Japanese investors could now be persuaded to take home some of the trillions of dollars that they have hoarded foreign stocks and bonds. That could add to global borrowing costs and drag on already cooling economic growth.

In the currency market, the yen continued to rise while the dollar slipped against a group of currencies at par.

Jefferies analyst Brad Bechtel noted that an incremental shift in capital flows and interest rates is key for the pair, adding, “The Fed is nearing completion of the long hike, which means is that real interest rates in the US have finished rising and will adjust slightly, easing the pressure. of the dollar.”

Meanwhile, Asian stocks broke a five-day losing streak, with Hong Kong up more than 2%. While the surge in Covid cases in Shanghai and Beijing raises concerns about economic growth, a flurry of comments from regulators suggest support is coming for the economy. China in general and real estate developers.

Oil prices are poised to end an unusually volatile year modestly higher. West Texas Intermediate crude oil futures hold above $78 a barrel, extending their gains into a fourth day, benefiting from a draw in US inventories and rising consumer confidence. go up.

This week’s main events:

  • US GDP, Initial Jobless Claims, US Conf. Table top index, fifth

  • US consumer income, new home sales, US durable goods, PCE deflation, University of Michigan consumer sentiment, Friday

Some key moves in the market:

share

  • S&P 500 futures were up 0.2% at 3:40 a.m. New York time

  • Nasdaq 100 futures rose 0.2%

  • Dow Jones Industrial Average futures rose 0.1%

  • Stoxx Europe 600 up 0.4%

  • The MSCI World Index rose 0.3%

currency

  • Bloomberg Dollar Spot Index drops 0.2%

  • The euro rose 0.3% to $1.0639

  • British Pound rose 0.3% to $1.2114

  • Japanese yen rose 0.4% to 131.99 to the dollar

electronic money

  • Bitcoin up 0.3% to $16,838.25

  • Ether rose 0.3% to $1,215.96

bonds

  • Yields on 10-year Treasuries fell 4 basis points to 3.63%

  • German 10-year yield fell three basis points to 2.28%

  • UK 10-year yield falls three basis points to 3.54%

Goods

This story was made possible with the help of Bloomberg Automation.

–With support from Ishika Mookerjee and Mark Cranfield.

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