Global Equities Rise as S&P 500 Hits 5,000-Point Milestone
Market Overview
Global equities rose on Friday, with the S&P 500 crossing the 5,000-point milestone for the first time ever, driven by U.S. inflation data raising expectations of an interest rate cut this year. U.S. Treasury yields also rose.
Stocks and Yields
The MSCI All Country stock index climbed 0.4% to a third straight weekly gain, buoyed by Wall Street where the rose above 5,000 points. Big gains in megacap stocks such as Nvidia (NASDAQ:) also contributed to the positive trend.
Larry Tentarelli, Chief Technical Strategist with Blue Chip Daily Trend Report, in North Andover, Massachusetts, mentioned that the new closing high over 5,000 bodes well over the intermediate to longer term.
Inflation Data and Implications
U.S. monthly consumer prices rose less than initially estimated in December, but underlying inflation remained a bit warm. The data revision did little to alter expectations for central bank rate changes. U.S. inflation data for January is coming next week.
Stock Market Performance
The fell 54.64 points, or 0.14%, to 38,671.69, the S&P 500 gained 28.70 points, or 0.57%, to 5,026.61 and the gained 196.95 points, or 1.25%, to 15,990.66. The yield on benchmark U.S. 10-year notes rose 0.7 basis points to 4.177%, from 4.17% late on Thursday. The yield rose 3.2 basis points to 4.4883%, from 4.456% late on Thursday.
Commodity and European Market Update
Gold prices came under pressure from stronger yields. Oil notched a gain for the week on worries over a broadening conflict in the Middle East after Israel rejected a ceasefire offer from Hamas.
European shares ended slightly lower under pressure from rising yields and sliding L’Oreal shares. The pan-European index closed 0.1% lower, but still eked out a weekly advance of 0.2%. L’Oreal dropped 7.6% after the French cosmetics company reported underwhelming fourth-quarter sales growth.
Market Highlights from Asia
Japanese shares hit 34-year highs. In China, mainland markets were closed and Hong Kong traded thinly and shut early, with the down 0.8% amid worries authorities might not deliver on promises for support.
“I am betting that (decisive action) is happening,” said Chi Lo, senior markets strategist for Asia Pacific at BNP Paribas (OTC:) Asset Management.
