NEW YORK / LONDON, July 7 (Reuters) – US equities rose on Thursday with Treasury yields as investors opted for the economic light at the end of the Federal Reserve’s rate hike tunnel, while that oil prices rose due to supply concerns and the pound sterling rose as Prime Minister of the United Kingdom. Boris Johnson resigned
In foreign exchange markets, the euro came closer to parity with the dollar shelter, which rose slightly against a basket of major currencies.
Sterling jumped after Johnson resigned under pressure from his own political party after a series of resignations and scandals. On Wednesday, the pound had reached its lowest level since March 2020. read more
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“What I’m seeing is optimism that maybe the Fed’s rate hike program won’t have disastrous consequences for the economy. We have economically sensitive stocks leading the way higher today with higher oil prices and interest rates said Jack Ablin, chief. investment officer at Cresset Capital in Chicago.
“It looks like investors are saying this is because of economic growth, not necessarily because of inflation. Otherwise, the market should go down.”
Feedback from Fed officials helped lift the mood with Gov. Christopher Waller calling U.S. recession fears “exaggerated.” He noted a rise in interest rates of 75 basis points in July, followed by a rise of 50 basis points in September, and possibly 25 thereafter, unless inflation persisted. Read more
The president of the St. Louis Fed Bank James Bullard said he sees a “good chance” of a soft landing for the economy.
The US central bank will hold its next policy meeting from July 26-27. The minutes of the June meeting published on Wednesday showed that at that time policymakers discussed how a more restrictive position might be necessary if high inflation persisted. Read more
Investors were expecting a possible break in rate hikes.
“The main thing right now is the direction of Treasury yields. It’s giving people a reason to believe that the Fed is nearing its end point in rising interest rates. That’s giving the market a little bit. of confidence to intervene and buy growth stocks that had been outperformed.
The Dow Jones Industrial Average (.DJI) rose 346.87 points, or 1.12%, to 31,384.55, the S&P 500 (.SPX) gained 57.54 points, or 1.50%, to to 3,902.62 and the Nasdaq Composite (.IX9IC.49) rose 57.54 points, or 1.50%. 2.28%, to 11,621.35.
Earlier, the pan-European index STOXX 600 (.STOXX) closed 1.88%. The MSCI Global Equity Indicator (.MIWD00000PUS) rose 1.57% and the emerging market index (.MSCIEF) rose 1.43%.
During the session, the euro reached its lowest point against the green dollar in two decades, approaching parity, a level not reached since December 2002.
The dollar index rose 0.019%, and the euro fell 0.23% to $ 1.0158.
The Japanese yen weakened 0.04% to $ 136.00, while the pound was last traded at $ 1.2021, up 0.76% on the day.
Bank of England lawmaker Catherine Mann said central banks should move quickly and aggressively when interest rates rise. Read more
THE RETURNS OF THE AUGENT TREASURE
Treasury yields were higher as investors waited for U.S. employment data ahead of the market opening on Friday to get clues about the strength of the economy and the Fed’s upcoming moves.
10-year benchmark notes fell last 26/32 in price to yield 3.0075%, from 2.911% on Wednesday afternoon. The 2-year ticket fell the last 4/32 in price to yield 3.0285%, from 2.961%.
Oil prices settled much higher, recovering from the strong losses of the previous two sessions, as investors again focused on reduced supply. Read more
US crude rose 4.26% to $ 102.73 a barrel and Brent ended at $ 104.65, up 3.93%.
Cash gold rose 0.1% to $ 1,740.19 an ounce. U.S. gold futures gained 0.16% to $ 1,737.60 an ounce.
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Report by Huw Jones in London, Tom Westbrook in Singapore and Sam Byford in Tokyo; Editing by Bernadette Baum, Chris Reese and David Gregorio
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