Stocks post seven straight months of gains, dollar stagnates

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  • MSCI ACWI finishes at a 3rd consecutive record
  • Wall Street, European stocks close lower
  • Dollar trades near breakeven, oil slips
  • All eyes are on Friday’s U.S. jobs report
  • Chart: Global Asset Performance http://tmsnrt.rs/2yaDPgn

NEW YORK / LONDON, Aug.31 (Reuters) – A global equity gauge posted its seventh straight month of gains and a close-to-close record on Tuesday, but stocks and the dollar mostly ended the day little change afterwards that US and Chinese economic data suggested a slowdown in growth ahead.

Markets have been calm amid the calm of late-summer trading as investors await a U.S. jobs report for August on Friday that could determine when the Federal Reserve will begin to withdraw support for the U.S. economy when it begins to reduce its bond purchases.

Tuesday’s data was not inspiring. U.S. consumer confidence fell to its lowest level in six months in August, as spike in COVID-19 infections and rising inflation dampened the economic outlook, which data from China also suggests, Canada and the EU. Read more

Chinese businesses and the economy as a whole came under increased pressure in August as factory activity grew at a slower pace and the service sector collapsed in the contraction. In Canada, the economy unexpectedly contracted 1.1% in the second quarter on an annualized basis. Read more

The Delta variant cast a shadow over optimism among U.S. consumers, which soared earlier in the year on expectations that coronavirus vaccines would bring a return to normal, said Jim Baird, chief investment officer. at Plante Moran Financial Advisors.

“Consumers are increasingly aware of the near-term risks to the economic recovery created by rising prices and the resurgence of COVID-19,” Baird said in a note. But confidence is relatively high and compatible with strong consumer spending, he said.

Investors are taking some risk after the US and Chinese economies, the world’s two largest, show signs of near-term weakness, said Edward Moya, senior market analyst at currency brokerage OANDA.

“The impact of the Delta variant on the US economy could be greater than initially anticipated and that does not bode well for third quarter spending,” he said.

Markets mostly ignored a surge in euro area inflation to a 10-year high in August, with further hikes likely, as the European Central Bank’s narrative of temporary inflation and ultra-easy politics for decades. years remained intact. Read more

MSCI’s All Country World Index (.MIWD00000PUS) hit a third consecutive closing record, ending 0.06% at 741.27, and also made August its seventh consecutive month of gains.

The STOXX Europe 600 (.STOXX) closed 0.38% lower, but the broad pan-European index recorded its seventh consecutive month of gains in its best monthly winning streak since 2013. Technology (.SX8P) was the Best-performing European sector in August, up 6% on several strong earnings reports.

MSCI World Index

On Wall Street, stocks hovered near the breakeven point. The Dow Jones Industrial Average (.DJI) fell 0.11%, the S&P 500 (.SPX) slipped 0.13%, and the Nasdaq Composite (.IXIC) slipped 0.04%.

Emerging market equities surged, with the MSCI EM Index (.MSCIEF) rising 1.78%.

The value fell slightly less than growth stocks, a change from Monday when tech stocks surged after Fed Chairman Jerome Powell last week indicated that interest rates would stay low well in the year. -beyond the date on which the Fed begins to reduce its bond purchases.

The dollar slipped to its lowest level in more than three weeks against a basket of currencies as investors waited for US employment data on Friday that could shape the Fed’s future monetary policy. The greenback then reduced its losses to have changed little.

The dollar index fell 0.05% to 92.6550, while the euro rose 0.09% to $ 1.1809. The yen traded up 0.09% to $ 110.0100.

US Treasury yields rebounded after easing slightly following US consumer confidence data. The benchmark 10-year yield increased 2.6 basis points to 1.3104%.

German benchmark bond yields hit their highest level in more than five weeks after higher than expected inflation and an ECB official called on the bank to cut back on emergency bond purchases as early as the fourth quarter.

The yield on the 10-year German Bund, the benchmark for the euro zone, reached -0.376%.

Oil fell as the Organization of the Petroleum Exporting Countries and its allies prepared for a meeting on Wednesday amid calls for the United States to pump more crude, although Brent was still trading well above $ 70 per barrel.

Brent futures fell 42 cents to $ 72.99 a barrel. US crude stood at 71 cents at $ 68.50 a barrel.

US gold futures were up 0.3% to $ 1,818.10 an ounce.

Asian equities broadly recovered overnight. The MSCI gauge of Asia-Pacific ex-Japan stocks (.MIAPJ0000PUS) gained 1.6%, while Japan’s Nikkei 225 (.N225) rebounded to rise 1.1% despite weak production data July industrial. Read more

Reporting by Herbert Lash Editing by Alistair Bell and Rosalba O’Brien

Our standards: Thomson Reuters Trust Principles.


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