Wall Street and global stocks rose on Monday, helped by positive economic data and bargain hunting, but remained close to recent six-week lows as investors braced for a rising interest rates in the United States and Europe.
* At least six Federal Reserve policymakers will speak this week, which could shed light on the future path of rate hikes amid a confusing mix of economic signals. Eurozone inflation figures will also influence investors’ expectations ahead of the central bank’s March meeting.
* Investors were buying weaker stocks during the session, with the Dow Jones Industrial Average, S&P 500 Index and Nasdaq Composite advancing between 0.5% and 0.9%.
* The MSCI World Stock Index rose 0.6%, after posting its biggest weekly decline since late September last week, falling 2.6%, helped by a meteoric rise in the dollar.
* “Now that equity markets are showing signs of exhaustion following the last Fed meeting, the S&P 500 is at critical technical support,” Morgan Stanley analysts wrote in a note on Monday. “Given our view on earnings, March is a high-risk month for the bear market recovery.”
* The two-year US Treasury yield, the most sensitive to changes in rate expectations, rose nearly 80 basis points during this period, while the S&P 500 lost 6% in value from its highs of five months affected on February 2.
* During the day, the yield on two-year paper fell 0.6 basis points, to 4.799%, while that on 10-year bonds fell 2.9 basis points, to 3.922%.
* European stocks rallied on gains in typically rate-sensitive sectors such as oil and gas, as well as technology, which fell 1.4% and 3.8% respectively last week. The STOXX 600, which subtracted 1.4% for the week, advanced 1.1%.
* The dollar was the main beneficiary of the Fed’s change in rate expectations, rising 3% this month against a basket of major currencies, marking its strongest monthly performance since September, when it hit peaks in 20 years.
* It fell 0.45% on the day, driven in part by gains in the pound sterling, which rose 0.8% after British Prime Minister Rishi Sunak struck a new deal with the European Union on trade rules for Northern Ireland after Brexit.
* Crude prices fell more than 0.7%, while spot gold added 0.3% to $1,816.26 an ounce.