Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Global shares gain as infrastructure spending, jobs data boost

EconomyJun 24, 2021 21:45
Saved. See Saved Items.
This article has already been saved in your Saved Items
2/2 © Reuters. A man stands on an overpass with an electronic board showing Shanghai and Shenzhen stock indexes, at the Lujiazui financial district in Shanghai, China January 6, 2021. REUTERS/Aly Song/File Photo 2/2

By Chris Prentice and Tom Arnold

WASHINGTON/LONDON (Reuters) -U.S. stock indexes set fresh records on Thursday and European shares closed near all-time highs, fueled by supportive U.S. jobless claims data and a breakthrough in infrastructure spending talks in Washington.

President Joe Biden on Thursday embraced a bipartisan Senate deal to spend hundreds of billions of dollars on infrastructure projects, building roads, bridges and highways in an expanded effort to stimulate the American economy.

The U.S. dollar retreated in a day of choppy trading, while sterling fell after the Bank of England kept its stimulus program unchanged and left its benchmark interest rate at an all-time low.

The S&P 500 and the Nasdaq closed at record highs, boosted by shares of Tesla and other top-shelf technology firms and jobless claims data that bolstered investor hopes of a steady labor market recovery.

The S&P 500 finished 0.58% higher, the Nasdaq Composite added 0.69%, and the Dow Jones Industrial Average rallied 0.95%.

"Jobless claims numbers came in a little high but looking week to week they’re still moving in the right direction," said Mike Loewengart, managing director of investment strategy at E*TRADE Financial.

The data is "another proof point that the economy is coming back to life, albeit maybe in a slightly bumpier fashion than some anticipated at this stage," he said.

The MSCI world equity index gained 0.55%. In Europe, the STOXX 600 gained 0.87%, ending near an all-time high set earlier this month after news that German business morale hit its highest in 2-1/2 years.

Britain's FTSE 100 share index rose 0.51% after the Bank of England kept the size of its stimulus program unchanged and left its benchmark interest rate at an all-time low of 0.1%, as expected.

In Asia, markets made smaller gains. MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.37%, recovering from a one-month trough touched earlier this week, while Japan's Nikkei was unchanged.

Stock markets have whipsawed over the last week, feeling the after-effects of a surprise projection for Federal Reserve rate increases as soon as 2023, which knocked stocks, boosted the dollar and led to the flattening of the U.S. bond yield curve.

Investors are now pricing the first full U.S. interest rate rise for February 2023, compared with December 2022 previously.

Ten-year U.S. Treasury yields hung below 1.5% as investors saw little reason for the Fed to deviate from its plans to raise interest rates in 2023, while government bond yields in the euro zone drifted lower, reversing early gains. [US/]

"Until bond yields break out in a sustainable fashion, in either direction, it remains very hard to determine which direction stocks are headed in over the near term," JPMorgan (NYSE:JPM) analysts wrote in a note. "Much continues to hinge on the upcoming growth data."

Germany's Ifo institute said its business climate index hit its highest level since November 2018 on surging corporate optimism about the second half of the year in Europe's largest economy. A Reuters poll of analysts had pointed to a June reading of 100.6.

It followed the release on Wednesday of strong European manufacturing data. ISM manufacturing and U.S. non-farm payrolls data are due next week.

The U.S. dollar edged lower against a basket of six other currencies in choppy trading. It remained well below last week's two-month high as traders navigated conflicting signals from Fed officials on the timing of a withdrawal of monetary stimulus. [FRX/]

On Wednesday, two Fed officials said a period of high inflation in the United States could last longer than anticipated, just a day after Fed Chair Jerome Powell played down rising price pressures.

Mexico's peso jumped, leading gains among its Latin American counterparts, after a surprise rate hike from the central bank.

The euro was up 0.05% against the dollar. The greenback eased against the Japanese yen but held near a 15-month high of 111.11 touched earlier in the session.

The BoE's decision on Thursday was largely anticipated by economists polled by Reuters who expect the central bank will wait to see if a post-lockdown jump in inflation proves transitory and whether unemployment rises when the government scales back its job-protection scheme.

The British pound shed 0.2% against the dollar.

Oil prices settled up, hovering near the previous session's three-year highs set amid drawdowns in U.S. inventories and accelerating German economic activity. [O/R]

Brent settled up 37 cents, or 0.5%, at $75.56 a barrel, after earlier rising to $75.78. U.S. crude settled up 22 cents at $73.30 a barrel, after hitting a session high of $73.61 earlier. [O/R]

Bullion prices dipped as the mixed Fed outlook kept investors on edge.

Spot gold dropped 0.3% to $1,773.13 an ounce by 4:14 p.m. EDT (2015 GMT). U.S. gold futures GCv1 settled 0.4% lower at $1,776.70. [GOL/]

Global shares gain as infrastructure spending, jobs data boost

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email