Photographer: Qilai Shen / Bloomberg
Photographer: Qilai Shen / Bloomberg
Global stocks held around record levels on Friday after surprisingly robust US economic data drove US stock indices to record highs. Yields on 10-year benchmark Treasury notes continued to decline.
The Asia-Pacific meter from MSCI Inc. rose but more modestly than the Wall Street rally. China performed better as data showed that the country’s economy boomed in the first quarter as consumer spending picked up, indicating a more balanced recovery.
European equity contracts soared and US futures tipped lower after the S&P 500 and Nasdaq hit record highs at 100 strong retail sales and unemployment benefit figures. Financial services were weakened by the decline in bond yields, even after Citigroup Inc. and Bank of America Corp. exceeded trading earnings.
Traders suggested foreign purchases and Geopolitical risks may have contributed to the Treasury rally, with many investors in a position for further weakness. The US dollar halted a series of declines.
Equities have hit new peaks amid the recovery in global growth, confidence in continued central bank policy support and some positive corporate earnings. However, the rise in government bonds points to persistent risks, with some countries facing spikes in Covid-19 infections and setbacks in vaccine introduction.
The surge in the bond market is “one of the most confusing dynamics in the markets right now,” said Michael Arone, investment strategist at State Street Global. Advisors“Part of it is that you saw the 10 year old moving very fast in a very short period of time, so this could be a pause before it starts to get higher again.”
The Chinese data showed that the gross domestic product in the first quarter rose by 18.3% compared to a year earlier, but that quarter-on-quarter growth slowed to 0.6%. Retail sales exceeded expectations while industrial output moderated.
Elsewhere, oil headed for its biggest weekly gains since early February amid optimism about the pandemic recovery. Buyer is on its way to its best week in about two months.
Wang Tao, chief of Asia economics and China economist at UBS Group AG, discusses the state of the world’s second-largest economy, its outlook and policies.
Markets: Asia. (Source: Bloomberg)
These are some of the most important movements in the financial markets:
Shares
- S&P 500 futures fell 0.1% from 6:58 am in London. The index rose 1.1%.
- The Japanese Topix index added 0.1%.
- The Shanghai Composite Index rose 0.9%.
- The Hang Seng index is up only 0.8%.
- South Korea’s Kospi index rose 0.1%.
- The Australian S & P / ASX 200 index fell 0.1%.
- Futures on Euro Stoxx 50 contributed 0.2%.
Currencies
- The Bloomberg Dollar Spot Index has changed little.
- The euro was $ 1.1970.
- The Japanese yen was at 108.81 per dollar.
- The offshore yuan changed little at 6.5282 per dollar.
Bonds
- The yield on 10-year Treasury bonds was 1.58%.
- Australia’s 10-year return was four basis points lower at 1.73%.
Raw materials
- West Texas Intermediate Crude Oil contributed 0.5% to $ 63.80 a barrel.
- Gold traded around $ 1,765 an ounce.
– With the help of Claire Ballentine and Katherine Greifeld