Il Nuovo Postiglione - Stock markets mostly rise as US data comforts rate outlook

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Stock markets mostly rise as US data comforts rate outlook

ECONOMY 26.03.2024

Global stock markets mostly rose Tuesday as US data comforted expectations that the Federal Reserve will be able to cut interest rates in the world's top economy.

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Data showed US durable goods ordered rebounded slightly more than expected in February, but by much less than the fall in January.

Meanwhile, data showed that US consumers' assessment of their current situation improved in March, but that they became more pessimistic about the future and their expectations to buy big-ticket items, autos and homes in the coming six months fell further.

Signs that US economic growth is moderating will help provide cover for US monetary policymakers to cut interest rates.

Recent guidance from the Federal Reserve pointed to three cuts before the end of the year. But strong economic data and comments from some central bank officials have fuelled worries it could come up short.

Analysts and investors will be keenly awaiting for the release US inflation data at the end of the week.

Investors are also gearing up for the first-quarter earnings season, with some observers warning that profit expectations, which have helped push several markets to record highs, may have gone too far and disappointing reports could spark a pullback in equities.

But other analysts think the rally has yet to run its course.

While many consider US equities to be overbought, "there are still many investors who have felt unable to take on enough long-side exposure to benefit from the rally which began in late October," said David Morrison at Trade Nation.

"And as more investors close their eyes, hold their noses and dive in, prices should continue to melt up."

Elsewhere on Tuesday, oil prices steadied after Monday's rally on worries about potential tight supplies.

New York cocoa prices breached $10,000 per tonne for the first time, and have more than doubled since the start of the year, due to poor harvests in leading producing nations.

"Chocolate is the new luxury good in town, and we expect that sweet treats will see their prices surge in response to this massive price rise," said Kathleen Brooks, research director at XTB.

"This has also pummeled chocolate makers around the world," she added, with shares in Hershey and Cadbury's owner Mondelez International both trading lower.

Meanwhile, debt-ridden French IT group Atos, the cybersecurity and data provider for the Paris Olympics, posted a huge annual loss but vowed that its troubles would not disrupt the Games.

The company reported a net loss of 3.4 billion euros ($3.7 billion) for 2023 on asset writedowns and said it was aiming for a debt restructuring by July.

Atos shares fell by nearly seven percent but recovered ground to end the day down 1.5 percent at 1.69 euros. The company's stock has plummeted from around 15 euros in July last year.

- Key figures around 1630 GMT -

New York - Dow: UP 0.3 percent at 39,421.62 points

New York - S&P 500: UP 0.3 percent at 5,231.04

New York - Nasdaq Composite: UP 0.3 percent at 16,435.62

London - FTSE 100: UP 0.2 percent at 7,930.96 (close)

Paris - CAC 40: UP 0.4 percent at 8,184.75 (close)

Frankfurt - DAX: UP 0.7 percent at 18,384.35 (close)

EURO STOXX 50: UP 0.4 percent at 5,064.18 (close)

Tokyo - Nikkei 225: FLAT at 40,398.03 (close)

Hong Kong - Hang Seng Index: UP 0.9 percent at 16,618.32 (close)

Shanghai - Composite: UP 0.2 percent at 3,031.48 (close)

Euro/dollar: DOWN at $1.0829 from $1.0841

Dollar/yen: UP at 151.48 yen from 151.42 yen on Monday

Pound/dollar: DOWN at $1.2629 from $1.2638

Euro/pound: DOWN at 85.74 pence from 85.76 pence

Brent North Sea Crude: DOWN 0.2 percent at $86.61 per barrel

West Texas Intermediate: UP less than 0.1 percent at $82.02 per barrel

burs-rl/cw

A.Rastelli--INP

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