July 20, 2024

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European stocks gain ahead of Powell comments: Markets Wrap

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(Bloomberg) — European stocks advanced and US Treasuries traded little changed before comments from Federal Reserve Chair Jerome Powell that may offer clues about the path of interest rates.

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The Stoxx 600 index climbed 0.4% while futures on the Nasdaq slipped. US Treasuries were steady and the dollar edged lower against most of its developed-nation peers. Crude prices fell even as the OPEC+ group of petroleum producing nations agreed to a supply cutback — a sign traders are skeptical it will be implemented.

Investors are pondering whether November’s scorching gains across asset classes can go further. Some suggest optimistic market wagers on the timing of interest-rate cuts next year read too much into recent comments by Fed speakers. Powell is set to speak at Spelman College in Atlanta on Friday, while euro-zone manufacturing data may add to the case for the European Central Bank to lower borrowing costs.

“Data prints seem to highlight that the US economy may be slowing down,” OCBC analysts including Selena Ling said a note. “Cooler demand may reinforce the notion that the Fed is likely done tightening for the current cycle and help build expectations for the Fed to start cutting rates” in the second quarter.

US statistics on Thursday showed a key measure of inflation eased in October, adding to the case for an end to the Fed’s tightening and bolstering the narrative that lifted markets globally last month.

The S&P 500 had one of its strongest Novembers on record, while the MSCI All Country World Index saw its third-largest monthly gain in the past decade. The Bloomberg Dollar Spot Index dropped by the most in a year, while US Treasury yields tumbled about 60 basis points in the month.

“Almost everyone was offsides coming into November,” said Ryan Detrick, chief market strategist at Carson Group. “There’s still a big opportunity for traders to chase gains in December, too.”

OPEC+ Uncertainty

Brent crude…

2023-12-01 03:20:45

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