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US stocks rise and government bonds slip lower as Biden meets western allies

U.S. stocks rose, European gas prices rose and government bonds remained under pressure for inflation fears as Joe Biden met with NATO leaders to discuss their response to Russia’s invasion of Ukraine.

The Wall Street S&P 500 stock index rose 0.5%, while the technology-focused Nasdaq Composite added 0.3% as traders moved money from a global bond market that is in process. The deepest depression Since 1990 at least.

The S&P climbed nearly 6% above its closing level on February 23, a day before Vladimir Putin launched Russia’s invasion of its neighbor.

Stock markets have shown “an extraordinary level of complacency”, said Unigestion’s investment director Olivier Marcio, arguing that “it is difficult to see how corporate profits can be maintained alongside higher inflation and lower economic growth”.

“There’s a clear difference between the guys in the bonds and the stockholders,” he said. “I think the liaisons have it right.”

Europe’s regional Stoxx 600, lower than 7% a year and trading unchanged on Thursday, has erased all of its losses since Moscow’s penetration began.

At the same time, government bond prices in the US, the eurozone and the UK continued to fall, as fears of sustained high global inflation – stemming from further possible sanctions on Russian energy – reduced the appeal of fixed-income paying securities.

The yield on the 10-year US Treasury bill, which underlies global financing costs and reverses its price, rose by 0.04 percentage points to 2.37%, close to the highest level since May 2019.

U.S. President Biden met with NATO heads on Thursday and formulated an agreement to step up preparations for potential chemical and nuclear weapons threats, while investors waited for EU leaders’ response to potential blockades of Russian fossil fuel imports at a summit later in the EU summit. a day.

German Chancellor Olaf Schultz warned that a ban on Russian energy “means putting our country and the whole of Europe in recession.” Germany imports a third of its oil from Russia and more than half of its gas and coal. Consumer price inflation in the eurozone Hit the record 5.8 percent in February, with economists expecting it to rise even more.

For financial markets, the best outcome of the EU summit will be a “top-level fiscal response,” to finance business assistance and higher energy costs for households, said Monica Defend, head of the Amondi Institute.

Brent crude fell just below $ 121 a barrel, now up about a quarter since Feb. 23. The index may exceed $ 200 this year, traders Warned At an event of the Financial Times in Switzerland.

Europe’s wholesale gas price futures added 7% to € 121 per mega watt hour, after reaching € 130 on Wednesday after Russian President Putin, said “Unfriendly” countries have to pay for Russian gas in rubles, and infuse doubt into existing supply deals. Prices are almost seven times higher than a year ago.

Germany’s 10-year bond yield rose 0.4% to 0.52%, close to its highest level since October 2018, when the price of the eurozone’s bonds fell. The UK 10-year gold yield added 0.05 percentage points to 1.68 percent, after Short-term price increase On Wednesday when the UK cut its debt issuance plans.

In Asia, Hong Kong’s Hang Seng Index was down 0.9%. The Japanese yen, which traded at a low of about six years against the US currency, weakened another 0.4% to ¥ 121.6 to the dollar.

US stocks rise and government bonds slip lower as Biden meets western allies Source link US stocks rise and government bonds slip lower as Biden meets western allies

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