The global stocks indicator closed at an all-time high on Monday as tech stocks quickly completed a corporate tax deal targeting American tech heavyweights and oil prices soared to a two-year high.
The MSCI Global Stock Index (.MIWD00000PUS) climbed 0.1% to a sixth record close in seven days as stocks rallied on expectations of a recovery from the coronavirus pandemic.
Crude rallied above $ 72 a barrel, continuing this year’s rally based on rising recovery demand and supply constraints from the Organization of the Petroleum Exporting Countries and its allies, before ditching profits as investors locked in profits.
US Treasury and Eurozone government bond yields rose in mostly sluggish trading ahead of the European Central Bank’s meeting on Thursday, the same day long-awaited US inflation data will be released.
Ten-year US Treasuries rose 0.1 basis points to 1.5704%, the lower end of the two-month range.
Germany’s 10-year bond yields climbed 0.2 basis points to -0.195, close to a one-month low hit after the US unemployment report was released on Friday. The data showed robust hiring growth, but not enough to spark fears of an overheating economy that could lead to a tightening of US monetary policy by raising interest rates.
According to Christopher Smart, chief global strategist at Barings, large tech companies are targeted by the G7 agreement on Saturday, which sets a minimum global corporate tax rate of at least 15%. …
Smart added that it has so far avoided a period of unilateral taxes and penalties from both the United States and the European Union.
On the political front, US President Joe Biden’s agenda could be tricky if he fails to change the Senate pirate rule, said Ed Moya, senior market analyst at OANDA in New York.
“We have reduced volatility and this makes the market very difficult to trade or worry about,” Moya said of the range-limited stock market.
“The market will have to wait a few months to gain some clarity on the recovery in the labor market and whether this price pressure will continue,” he said, referring to the sharp rise in US inflation likely to occur on Thursday.
The MSCI ACWI, a global benchmark for stock performance in 50 countries, closed at 717.00. The index is heavily targeted at the US tech giants, with half rising and others falling.
Microsoft Corp (MSFT.O) rallied 1.2%, Facebook Inc (FB.O) rallied 1.9%, and Apple Inc (AAPL.O) gained 0.008% after spending most of the day in minus. Amazon.com Inc (AMZN.O) shares fell 0.3%.
On Wall Street, the Dow Jones Industrial Average (.DJI) dropped 0.36%, the S&P 500 (.SPX) shed 0.08%, and the Nasdaq Composite Index (.IXIC) added 0.49%.
In Europe, burgeoning automakers have more than offset an early fall in commodity stocks, fueled by gloomy Chinese export data.
Copper imports from China fell 8% in May from the previous month as record high prices further weakened buying interest and overall export growth fell short of analysts’ forecasts. read more
Three-month copper on the London Metal Exchange fell 0.3% to $ 9,925 per tonne.
The European Automotive and Parts Index (.SXAP) rose 0.9% to its highest level since March 2015, continuing to rise 5.3% from the previous week.
Eurozone banks (.SX7P) were broadly higher as government bond yields remained stable near monthly lows ahead of Thursday’s ECB meeting, where policymakers are expected to stick to their dovish stance.
The FTSEurofirst 300 European Index (.FTEU3) added 0.29% to finish at 1,747.17, a new record for the close. The Continental STOXX 600 Index (.STOXX) also set a new close at 453.86.
Gold prices strengthened as the dollar fell, the dollar index fell 0.2%, while the euro rose slightly against the dollar to $ 1.2196. The Japanese yen gained 0.23% against the US dollar to hit 109.26 per dollar.
US gold futures rose 0.4% to $ 1,898.80 an ounce.
Oil has risen in price over the past two weeks, with Brent crude this year rising 38% and the US benchmark West Texas Intermediate Index by 43%.
Brent crude futures fell 40 cents to $ 71.49 a barrel. US oil futures fell 39 cents to $ 69.23 a barrel.
Overnight in Asia, Asia Pacific’s broadest stock index outside Japan, MSCI (.MIAPJ0000PUS), fell 0.08%, while Japan’s Nikkei (.N225) climbed 0.3% to reach its highest level in nearly month.
Taiwan stocks (.TWII) lost 0.4% as a spike in COVID-19 cases hit three technology companies in northern Taiwan, including chip packaging company King Yuan Electronics (2449.TW). read more
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