The MSCI All-World index, which on Friday reached a two-month low, was up 0.2%, lifted by gains in Europe, where the FTSE 100 reached a record high, while the STOXX 600 traded at one-week highs
Global shares rose on Tuesday, driven by a recovery on Wall Street, where investor focus is on earnings reports from the U.S. megacaps, while the yen reached a fresh 34-year low against the dollar, prompting a warning from Japanese officials.
The MSCI All-World index, which on Friday reached a two-month low, was up 0.2%, lifted by gains in Europe, where the FTSE 100 reached a record high, while the STOXX 600 traded at one-week highs thanks to the technology sector.
Adding to the optimism was a string of surveys of business activity that showed Germany returned to growth in early April after months of decline, while activity in the wider euro zone expanded at fastest rate in around a year.
Investors are less concerned right now about the threat of a major re-escalation of tension in the Middle East and more focused on earnings.
Against that backdrop, gold is heading for a week-on-week drop of 3.2%, its biggest this year, while oil has dropped from last week’s highs.
We are turning a bit more positive on risk sentiment. There still remains a fair bit of uncertainty around geopolitics and increasing U.S. real yields, but we are more positive than we were a week ago, according to Mohit Kumar, a strategist at Jefferies.
The dollar pulled back from its recent highs, but is comfortably supported by the view among investors that no rate cuts will be forthcoming any time soon from the Fed and by the jump this month in Treasury yields to their highest since November.
On Wall Street, big tech shares outperformed ahead of quarterly results this week, pushing the Nasdaq up 1.1%. Nvidia advanced 4.4% while Amazon.com added 1.5% and Alphabet climbed 1.4%, although Tesla shed 3.4 as it cut prices in its major markets.
Tuesday brings a wealth of big-cap earnings, including Tesla, PepsiCo, UPS and Halliburton.
Odds are the earnings reports that we see over the next few weeks will be positive, but obviously there’s still issues around what the Federal Reserve will do the next, according to Shane Oliver, chief economist at AMP. It is too early to say that problems in the Middle East have gone away.
He added: There are lots of things that could cause volatility between now and the end of the year. And so we are probably coming to a more constrained, more volatile period for markets.
Aside from Tesla, Meta Platforms, Alphabet and Microsoft will release earnings this week.
