(Reuters) – Shares on Wall Street were mixed, as global equities drifted on Friday toward their biggest one-month rally since November 2020 during a shortened, muted trading session following the U.S. Thanksgiving holiday.
Oil futures traded steady ahead of next week’s OPEC+ meeting, which could bring some kind of agreement on output cuts in 2024, and gold prices were on track for a second weekly gain.
MSCI’s index of global shares had eased 0.01% by 9:49 a.m. EST (1449 GMT), but was still headed for a monthly gain of 8.5% after investors grew increasingly confident that U.S. interest rates have peaked, with the market narrative shifting to the timing of cuts..
The Dow Jones Industrial Average rose 68.74 points, or 0.19%, to 35,341.77; the S&P 500 index lost 0.97 points, or 0.02%, to 4,555.65; and the Nasdaq Composite lost 27.56 points, or 0.19%, to 14,238.30.
The STOXX 600 index rose 0.69%, as Europe’s broad FTSEurofirst 300 index gained 0.15%.
In geopolitical news, Israel and Hamas started a four-day ceasefire on Friday and the militants were set to release 13 Israeli women and child hostages later in the day, the first sign of detente in the near seven-week war.
The U.S. central bank has raised benchmark borrowing costs by more than five percentage points since March 2022 as part of a global monetary tightening cycle.
“Weaker (economic) data and weaker inflation in the U.S. has given markets hope you are going to start to see rate cuts,” said Peter Doherty, investment management director at Arbuthnot Latham in London.
“But the debate is whether we should be taking profits now,” he added, given the potential for a “re-acceleration of U.S. growth,” after the world’s largest economy confounded recession forecasts throughout 2023.
Despite optimism having surged across global markets this month, there may also be a lull ahead as investors position their portfolios for 2024, some analysts said.
U.S. 10-year Treasury yields, which set the tone for borrowing costs worldwide, rose to 4.4724% from 4.416% previously. They were still comfortably below the 5% milestone reached last month.
Minutes from the latest Fed policy meeting signalled there would not be more hikes unless progress against taming inflation faltered.
Germany’s 10-year bund yield rose for a third session, reflecting pushback from European Central Bank officials against speculation they were ready to start thinking about cutting rates.
The dollar index, which measures the U.S. currency against six peers, was down 0.33%, nearing a three-month low as rate cut bets reduced the appeal of holding dollars.
In Europe, however, markets reflected a growing pessimism about central banks loosening monetary policy.
Euro zone government bond yields were on track to close the week higher as investors balanced recession fears against comments from European Central Bank policymakers pushing against market expectations for rate cuts in 2024.
Germany’s benchmark 10-year bund yield has risen 5 basis points in a week.
In the UK, where the Bank of England is now viewed as having to keep interest rates at a 15-year high until late next summer, sterling rose to the highest since early September.
In Asia, Japan’s Nikkei share index climbed, charging back toward a 33-year high hit on Monday.
Data on Friday showed that Japan’s core consumer inflation picked up slightly in October, although by less than expected.
Mainland China’s CSI 300 index dropped 0.7% to its lowest close in more than a month, reflecting investor concern about a property slump and sluggish economy.
On Friday, foreign investors sold a net 6.2 billion yuan ($859.8 million) of mainland Chinese shares via the stock connect channel, the biggest daily outflow in more than a month.
Oil prices were steady after tumbling more than 1% on concerns over a delayed OPEC+ meeting. [O/R]
Spot gold prices rose 0.43% to $2,000.44 an ounce. [GOL/]
($1 = 7.2111 Chinese yuan renminbi)
