Even though stocks have been edging higher Wednesday, it is not entirely certain that the worst of this year’s downturn has passed and concern lingers about a global recession due to hawkish central banks.
Despite signs that Russia will restart gas exports to Europe through the Nord Stream pipeline on Thursday, the Stoxx 600 Index managed to maintain modest gains.
United States stock markets fluctuated, with contracts from the Nasdaq 100 being the strongest, as Netflix Inc. shares surged in extended trading as there was only a slight decrease in the number of subscribers. 10-year Treasury yields fell below 3% as Treasuries rose.
In the face of the possibility that the European Central Bank will hike interest rates more than expected on Thursday, the euro hovered around a two-week high against the dollar. The dollar became steady after it dipped for three consecutive days.
The Federal Reserve’s decision not to tighten monetary policy very aggressively gives investors some hope that company earnings will hold up. As a result, the global economic slowdown and the ongoing crisis in Europe has sent investors on edge.
“The fact that companies are showing a certain resilience to the current environment is reassuring market operators who have now started betting on a less aggressive monetary tightening than initially expected,” ActivTrades analyst Pierre Veyret said. “Even if we’re not out of the woods yet, more and more traders now tend to believe the worst is behind for equity markets this year.”
After witnessing the worst combined first-half losses on stocks and bonds in world history, optimism is tough for investors to feel, despite the market already adjusting by the loss of $8 trillion.
Despite pared losses, the Bloomberg dollar index traded little changed. This week, the index fell nearly 0.9%, underscoring the waning demand for haven assets and an improving market climate.
The price of West Texas Intermediate crude oil declined below $103 a barrel. As Bitcoin rises above $23,000, it emerges from a trade range of one month.
A 40-year high in UK inflation was recorded in June, resulting in high inflation in living costs and increased pressure on the Bank of England to adopt an aggressive rate hike on inflation next month. While the pound strengthened slightly, the FTSE 100 rose 0.3%.
Some important events to look out for this week:
- This week’s earnings include Tesla
- On Thursday, the rate decisions of Bank of Japan and European Central Bank.
- On Thursday, the Nord Stream 1 pipeline is set to reopen following maintenance.
There are some key markets trends:
Stocks
- By 9:58 a.m. London time, the Stoxx Europe 600 had risen 0.1%.
- Futures on the S&P 500 didn’t changed much.
- The Nasdaq 100 Index futures jumped up 0.2%
- A little changes in the futures of Dow Jones Industrial Average.
- MSCI Asia Pacific Index grew by 1.3%
- The MSCI Emerging Markets Index has been risen by 0.8%
Bonds
- The interest rate on 10-year Treasuries decreased four basis points to 2.99%
- 10-year German yields fell five basis points to 1.23%
- The 10-year British yield fell seven basis points to 2.11%
Commodities
- Brent crude declined by 1% to $106.25 a barrel.
- Gold prices fell 0.2% to $1,707.88 an ounce.
Currencies
- Dollar Spot Index little changed from the previous day.
- The euro had little effect at $1.0232
- Japanese currency- Yen was little changed against the dollar at 138.26
- The offshore yuan was worth 6.7568 per dollar down by 0.2%
- The British pound didn’t change much against the dollar $1.2002
