Image: Reuters Berita 24 English - Stocks on global markets went up on Friday and for the week as a whole, thanks to a recent drop in commo...
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| Image: Reuters |
Berita 24 English - Stocks on global markets went up on Friday and for the week as a whole, thanks to a recent drop in commodity prices that made people less worried about inflation and the likelihood of rate hikes.
The S&P 500 went up by 3.1%, which was its biggest percentage gain in a single day since May 2020. The MSCI global index went up by 4.8% for the week, ending a streak of three weeks in which it went down.
Yields on U.S. Treasury bonds moved up from their lowest point in two weeks.
Investors have been worried that the Federal Reserve and other major central banks' aggressive efforts to fight inflation by raising interest rates could cause a recession, which would lower demand for commodities and other goods.
Quincy Krosby, chief equity strategist at LPL Financial in Charlotte, North Carolina, said, "The stock market was oversold coming into this week, so it was time for a bounce."
"Oil prices and other commodity prices have gone down," she said, adding that the move of the market shows "expectations of at least a noticeable slowdown, if not a full-on recession."
Krosby also said that the reading from the University of Michigan consumer sentiment survey about inflation expectations for the next five years was good for stocks. It went down from the initial estimate of 3.3% at the middle of June to 3.1%.
Last week, the S&P 500 showed that the market is in a bear market.
The Dow Jones Industrial Average went up by 823.32 points, which is 2.68 percent. It now stands at 31,500.
The S&P 500 went up 116.01 points, or 3.06 percent, to 3,911.74, and the Nasdaq Composite went up 375.43 points, or 3.34 percent, to 11,607.62.
For the week, the S&P 500 went up 6.4%, the Dow went up 5.4%, and the Nasdaq went up 7.5%.
The STOXX 600 index for all of Europe went up 2.62 percent, and the MSCI index of stocks around the world went up 2.63 percent.
Benchmark copper on the London Metal Exchange was down 0.5% to $8,367 per tonne after reaching $8,122.50. This is down 25% from its peak in March and the lowest level since February 2021. Other metals used in industry also tumbled.
Oil prices went up on Friday, but for the second week in a row, they went down.
Brent crude ended the day up $3.07, or 2.8%, at $113.12 per barrel, and U.S. West Texas Intermediate crude ended the day up $3.35, or 3.2%, at $107.62 per barrel.
Yields on the Treasury market have gone down from more than a decade-high levels reached before the Fed meeting last week. During the meeting, the rates were raised by 75 basis points.
Fed funds futures traders now think that the benchmark rate will go up to about 3.5 percent by March, which is less than what they thought last week, when they thought it would go up to about 4 percent.
The benchmark 10-year yield was 3.125 percent the last time we looked. They have gone down since June 14, when they were at their highest level since April 2011.
On the foreign exchange market, the value of the U.S. dollar went down for the first time this month.
In New York trading in the afternoon, the dollar index, which compares the value of the U.S. dollar to six major currencies, fell by 0.2% to 104.013.
The fall of the U.S. dollar helped even currencies that focus on commodities, like the Australian dollar and the Norwegian crown. The Australian dollar went up by 0.8% to US$0.6946.
Spot gold went up 0.2% to $1,826.39 per ounce.
