Global equities end lower amid strong US data and inflation concerns

Global stock markets fell behind on Thursday after falling from near record highs earlier in the week, as investors studied strong reports of US data on signs of economic recovery and inflation.

US stocks faltered during the session and ended lower as investors received bullish reports on corporate tax hikes, but remain wary of the potential change in Federal Reserve monetary policy. Read more

Analysts said moves in major stock indexes had been muted in recent days, as concerns about high valuations of many stocks after the months-long rally in US markets have some investors thinking.

“The market is digesting strong economic data with inflationary pressures and wondering if this will change the timing of the Fed’s cut and how to factor it into stock prices,” said Brad Neuman, director of market strategy at Algiers to New York.

Oil was little changed after two straight days of gains that took oil futures to year-long highs, after weekly US crude inventories fell sharply while fuel inventories rose more provided that.

US crude recently rose 0.07% to $ 68.88 a barrel and Brent was at $ 71.36, up 0.01% on the day.

Gold slipped more than 2% as the strengthening labor market helped propel the dollar higher.

The dollar index (.DXY), which tracks the greenback against a basket of six other currencies, rose 0.574 points, or 0.64%, to 90.483 after falling 2% in April and 1. 6% in May.

The euro last lost 0.66% to $ 1.2129, moving away from highs reached earlier in the week, while the broad European index FTSEurofirst 300 (.FTEU3) fell 0.07 % at 1,736.44.

A better-than-expected US weekly unemployment report and private employment figures for May indicated strengthening labor market conditions, while a measure of service sector activity reached a record high, indicating a robust economic rebound. Read more

The strong data could force the Federal Reserve to reduce its support for the crisis sooner than expected, despite assurances to the contrary from central bank officials.

Still, wary investors moved away from big bets on inflation concerns ahead of Friday’s release of U.S. jobs data, which should further clarify whether the faster-than-expected pace of the economic recovery can be. maintained and what that might mean for monetary policy. Politics.

The MSCI World Stock Index (.MIWD00000PUS), which tracks stocks from 50 countries, lost 3.06 points, or 0.43%, to 711.36.

The Dow Jones Industrial Average (.DJI) lost 23.34 points, or 0.07%, to 34,577.04, the S&P 500 (.SPX) lost 15.27 points, or 0.36%, to 4 192.85 and the Nasdaq Composite (.IXIC) lost 141.82 points, or 1.03%, to 13,614.51.

A surge in eurozone economic activity did little to improve sentiment. The IHS Markit Final Composite Purchasing Managers Index (PMI) jumped to 57.1 last month from 53.8 in April, its highest level since February 2018. read more

The benchmark 10-year notes last fell 11/32 to a return of 1.6284%, from 1.591%. Read more

As broad stock markets remain near record highs, momentum seen earlier in the year has run out of steam as investors fear a stronger-than-expected rebound in COVID-19 means higher inflation and an earlier-than-expected tightening of monetary policy.

Thursday’s weekly U.S. jobless claims report will be followed by monthly employment figures on Friday, which investors hope will offer new insight into the labor market’s recovery.

So far, however, “increases in inflation expectations have coincided with good performance in stocks recently,” said Oliver Jones, senior market analyst at Capital Economics.

“In general, we believe these conditions will remain in place for some time to come.”

Capital Economics predicts that real world production will grow at the fastest rate in nearly 50 years this year.

“While it is possible that the big central banks will end up tightening their policies faster than expected if inflation does not fall as they anticipate, it will be difficult to say if that will happen until next year at most. early, ”Jones says.

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