NEW YORK, Oct 13 ― Stock markets worldwide rebounded yesterday after a multi-day sell-off but still registered their biggest weekly losses in months, while US Treasury yields rose and the dollar held its gains.
“People are starting to buy in, thinking the higher-flying growth stocks were oversold,” said Janna Sampson, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.
But until the United States and China reach a trade deal, the rebound could be vulnerable as investors are anxious about the impact of tariffs on corporate profits. “If earnings come out good I think this rally is sustainable if we don’t get negative trade news,” she said.
Kicking off the US earnings reporting period, three of the largest US banks reported double-digit profit growth on Friday. The results reflected an array of positive business factors including a lift from cost-cutting programs implemented after the 2007-2009 financial crisis.
All three major US stocks indexes posted their biggest weekly per centage declines since March 23, while the small-cap Russell 2000 index fell 5.2 per cent for the week, its biggest weekly drop since January 2016.
The biggest market shakeout since February has been blamed on factors including fears about the impact of the US-China tariff fight, a spike in US bond yields this week and caution ahead of earnings season.
The Dow Jones Industrial Average rose 287.16 points, or 1.15 per cent, to 25,339.99, the S&P 500 gained 38.76 points, or 1.42 per cent, to 2,767.13 and the Nasdaq Composite added 167.83 points, or 2.29 per cent, to 7,496.89.
For the week, the S&P 500 was down 4.1 per cent.
The pan-European FTSEurofirst 300 index lost 0.25 per cent and MSCI’s gauge of stocks across the globe gained 1.10 per cent. The MSCI index was down 3.9 per cent for the week in its biggest weekly decline since March 23.
US Treasury yields edged up, recovering from falls in the previous session, as investors unwound safe-haven bids.
Benchmark 10-year US Treasury notes last fell 10/32 in price to yield 3.167 per cent, from 3.131 per cent late on Thursday.
The dollar climbed against a basket of currencies along with the rebound in equities and as robust Chinese export figures soothed worries about the world’s second-biggest economy and its trade war with Washington.
China’s trade surplus with the United States hit a record high in September, providing a likely source of contention with Trump over trade policies and the yuan currency.
The data showed solid expansion in China’s overall imports and exports, suggesting little damage to the country from the tit-for-tat tariffs with the United States.
The dollar index rose 0.25 per cent, with the euro down 0.3 per cent to US$1.1558 (RM4.8023).
Gold was down 0.5 per cent at US$1,217.81 an ounce. On Thursday, bullion jumped about 2.5 per cent on safe-haven buying during the equities selloff.
Crude oil futures ended slightly higher, following gains in the stocks market, after earlier swinging lower on a weakening demand outlook. US crude rose 0.5 per cent to settle at US$71.34 a barrel, while Brent gained 0.2 per cent to US$80.43. ― Reuters
Source: The Malay Mail Online