Monday Market Minutes: Don’t Drown, Shake

Global stock markets rose sharply on Friday as U.S. Treasury bond yields fell as investors continued to bet interest rates won’t rise as much as they previously feared as inflation could reach a peak.

Markets’ confidence in the plateau of inflation in the United States was bolstered by data showing a slowdown in consumer and producer prices in July following the rapid rise in the rate of fire of the Reserve federal.

The MSCI World Stock Index, which tracks stocks from 50 countries, rose 0.25% on Friday while the European STOXX 600 Index gained 0.16% for the day and 1% for the week.

US Treasury yields were lower as traders pondered a moderation in Fed monetary policy. Yields on benchmark 10-year Treasury bonds fell to 2.83%, after hitting 2.902% on Thursday, the highest since July 22.

The Dow Jones ended up 424.38 points, or 1.27%, to close at 33,761.05. The S&P 500 added 1.73% to end at 4,280.15, and the Nasdaq jumped 2.09% to 13,047.19.

For the week, the S&P 500 was up 3.26% on the week, its longest weekly winning streak since November 2021. The Dow was up 2.92% on the week, while the Nasdaq was up 3 .08%. For the Nasdaq, it was also the fourth consecutive positive week.

Last week’s rise extended the rebound from the mid-June lows. The S&P 500 is up 16.7% from those lows and has halved its losses from the high.

The Dow Jones gained nearly 13% and the Nasdaq jumped 22.6% as investors (regained) confidence in tech stocks, believing the pace of Fed rate hikes will slow in the coming months .

The ASX 200 fell 0.38% on Friday to be up 0.24% for the week. The index is up 9.3% since the lows of mid-June.

The overnight futures market rose 39 points on Friday evening our time, meaning the ASX will open strongly this morning as investors battle the first of the last two and a few busy weeks of the trading period. June 30 reference.

Bond yields generally rose as the drop in yields of previous weeks had gone a bit too far too fast. Oil prices rose in part due to US supply disruptions and expectations of increased demand.

Metal prices have also increased. The $A rose well above 71 US cents as the US$ fell.

The Australian dollar ended at 71.25 cents US, up more than 2 cents US from 69.14 cents at the previous Friday’s close.

US bond yields ended at 2.83%, unchanged from the previous week, but analysts point out that the yield curve remains inverted (short-term rates are higher than long-term rates), which suggests that investors still see a high probability of a recession or a sharp slowdown in growth.

The rate debate was changed by July’s stagnation in the consumer price index compared to June largely due to lower gasoline prices. The Producer Price Index recorded a surprise month-on-month drop last month, while on Friday import prices also fell more than expected due to falling oil prices and petroleum products.

These results prompted economists, analysts and investors to intensify their discourse on the “peak inflation” in the United States.