Global markets rally on earnings, data, bond prices slip
MSCI's all-country world stock index rose 0.77%, while the FTSEurofirst 300 index of leading companies rose 1% to 1,318.23
New York: Global equity markets rose and bond prices eased on Tuesday on solid corporate earnings on both sides of the Atlantic and an upbeat US consumer confidence report that more than made up for weak American housing and industrial data.
Market moves were mostly muted ahead of a two-day Federal Reserve meeting that begins on Tuesday, when the US central bank will likely reinforce its stated willingness to wait a long while before hiking interest rates. The Fed is expected to announce the end of its massive bond-buying stimulus, known as quantitative easing.
The dollar index pared losses after the Conference Board reported US consumer confidence hit its highest in seven years in October, reducing worries over disappointing data on domestic home prices and durable goods orders.
Major US stock indexes hit session highs on the consumer sentiment report and corporate earnings that are beating expectations at a higher rate than recent quarters.
With 245 companies in the S&P 500 having reported earnings so far in the third quarter, 73.5% have beat analyst expectations, according to Thomson Reuters. Over the past four quarters, 67% of companies have beat estimates.
In Europe about a quarter of companies listed on the STOXX Europe 600 benchmark have reported results so far, with 66% beating profit forecasts, Thomson Reuters data show.
“The strength of the current earnings season justifies owning equities, and we think there will be a recovery in the equity market," said James Butterfill, global equity strategist at Coutts in London.
MSCI’s all-country world stock index rose 0.77%, while the pan-European FTSEurofirst 300 index of leading companies rose 1% to 1,318.23.
On Wall Street, the Dow Jones industrial average rose 61.5 points, or 0.37%, to 16,879.44. The S&P 500 gained 12.09 points, or 0.62%, to 1,973.72 and the Nasdaq Composite added 53.64 points, or 1.2%, to 4,539.57.
The dollar index, which measures the greenback against a basket of six currencies, was last down 0.18% at 85.341. The dollar weakened against the euro, with the euro zone currency last at $1.2742, up 0.35% on the day.
The greenback briefly turned negative against the yen on the weaker US data, but regained some of its earlier rise and was last up 0.15% at ¥107.97.
US treasuries prices eased on the rally in global equity markets and as investors awaited the results of the Fed’s meeting. The 10-year treasury notes fell 4/32 in price to yield 2.2729%.
Brent crude oil steadied around $86 a barrel on Tuesday as a rally in European equities and a fall in the dollar offset weak US data. Brent for December was up 8 cents at $85.91 a barrel while US December crude was up 32 cents at $81.32. Reuters
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