Global shares rise, US yields drop

by Jonathan Adams
World shares mixed

MSCI’s gauge of stocks across the globe added 0.2% to 846.07

Global shares edged higher in choppy trading on Thursday, snapping three consecutive sessions of losses, while U.S. Treasury yields and strong corporate results allayed worries over upcoming U.S. elections and interest rate cuts.

The US benchmarks S&P 500 and the Nasdaq closed higher, with gains in consumer discretionary stocks and losses in materials and utilities equities. The Dow closed lower. The Dow Jones Industrial Average skidded 0.33% to 42,374.36, the S&P 500 added 0.21% to 5,809.86 and the Nasdaq Composite gained 0.76% to 18,415.49.

European shares added 0.03%, ending a streak of three successive losses following positive results from companies including Renault, Unilever and Hermes. MSCI’s gauge of stocks across the globe added 0.2% to 846.07.

Markets have traded lower over the last three or four days as a bit of a pause after a huge surge, with most of the equity indexes still trading rather near their all-time highs, according to Michael Farr, president and chief executive at Farr, Miller & Washington.

Perhaps the Fed isn’t going to be reducing rates quite as extensively and quickly as (investors) hope. However, the real bottom line is the economy doing OK and earnings season is coming on with reasonable gains, he said.

Traders are pricing in a near-95% probability of a 25-bp cut at the Fed’s November meeting, according to the CME Group’s FedWatch Tool. Benchmark 10-year note yields were down 3.4 bps at 4.208% after touching 4.26% on Wednesday, the highest since July 26.

The 10-year Treasury yield has been rising in recent weeks partly because both candidates in the U.S. presidential election are keen on spending money, which will widen the deficit, according to Mark Malek, chief investment officer at SiebertNXT in New York.

An increase in the deficit will certainly require more government debt and more government debt supply will certainly put upward pressure on yields, particularly 10-year yields, he added.

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of Trading and Investment News. The information provided on Trading and Investment News is intended for informational purposes only. Trading and Investment News is not liable for any financial losses incurred. Conduct your own research by contacting financial experts before making any investment decisions.

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