NEW YORK, April 19 — A gauge of global stocks rose for a second straight day yesterday to reach its highest since early February as the pace of US earnings season picked up, while Treasury yields dipped after three straight sessions of gains.
On Wall Street, the S&P 500 closed roughly unchanged. A 1.70 per cent drop in Goldman Sachs after its quarterly results, as well as a 2.81 per cent decline in Johnson & Johnson weighed on the Dow Jones Industrial Average to leave it almost unchanged, offsetting gains in Home Depot and Boeing.
Goldman peer Bank of America veered between gains and losses in choppy trading after its earnings beat estimates, and was last up 0.63 per cent.
“Earnings season so far has actually been better than expected by far on both earnings and revenues,” said Randy Frederick, managing director, trading and derivatives at Charles Schwab in Austin, Texas.
“I had a feeling when the beginning of this earnings season started that we might have set the expectations bar a little too low, that seems to be the case so far. The results aren’t spectacular, but the expectations bar was set pretty low.”
The Dow Jones Industrial Average fell 10.55 points, or 0.03 per cent, to 33,976.63 the S&P 500 gained 3.55 points, or 0.09 per cent, to 4,154.87 and the Nasdaq Composite dropped 4.31 points, or 0.04 per cent, to 12,153.41.
European shares closed higher, in part due to solid economic data from China, led by gains in travel and leisure stocks, and the STOXX 600 closed at its highest level since February 11, 2022.
The pan-European STOXX 600 index rose 0.38 per cent and MSCI’s gauge of stocks across the globe gained 0.24 per cent. MSCI’s index had earlier reached its highest level since February 3 at 658.29.
Investors have turned their focus to corporate earnings as the market has largely priced-in a 25 basis points rate hike from the Federal Reserve at its May meeting, according to CME’s FedWatch Tool, with expectations standing a level of more than 83 per cent.
St. Louis Federal Reserve President James Bullard said yesterday in an interview with Reuters that the Fed should continue hiking interest rates as recent data has shown persistent inflation in an economy that is likely to continue to grow.
However, Atlanta Federal Reserve President Raphael Bostic said in an interview with CNBC the Fed most likely only has one more hike ahead.
Longer-dated US Treasury yields dipped, with the benchmark 10-year falling for the first time after three straight sessions of gains, as investors weighed whether the Fed would pause its rate hike cycle after the May meeting.
The yield on 10-year Treasury notes US10YT=RR was down 1.3 basis points to 3.578 per cent while the two-year US2YT=RR US Treasury yield, which typically moves in step with rate expectations, was up 2.8 basis points at 4.216 per cent.
The dollar was weaker against most major currencies after the data from China, while the pound strengthened against the greenback thanks to pay growth data in Britain boosting expectations the Bank of England will raise rates in May.
The dollar index fell 0.362 per cent, with the euro up 0.39 per cent to US$1.0969 (RM8.73).
The Japanese yen strengthened 0.32 per cent versus the greenback at 134.05 per dollar, while Sterling GBP= was last trading at US$1.2426, up 0.42 per cent on the day.
Oil prices were little changed, as the upbeat China data was countered by concerns that rising rates could dent the growth outlook and sap demand.
US crude settled up 0.04 per cent at US$80.86 per barrel and Brent was at US$84.77, up 0.01 per cent on the day. — Reuters
