Global, US stocks fall; oil, gold rise over 1% on geopolitical risk
Item 1 of 2 Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., December 2, 2024. REUTERS/Brendan McDermid/File Photo
NEW YORK/LONDON, Dec 9 (Reuters) – Global shares turned lower on Monday as traders focused on U.S. inflation data and chip stocks fell, while Beijing’s promise of stimulus and the sudden collapse of the Syrian government boosted oil and gold prices more than 1%.
“In addition to being reminded that December is positive ‘close to three-fourths of the time,’ we have seen record equity inflows, full positioning from asset managers and the highest ever reading from the Conference Board’s survey of retail investor expectations,” Morgan Stanley’s chief investment officer, Lisa Shalett, said in a note.
“Complacency indicators are flashing, however, and while we appreciate technicals’ short-term validity, we encourage long-term investors to be measured in their enthusiasm,” she said.
COULD EXPECTED FED RATE CUT BE DERAILED?
Last week’s U.S. November payrolls report showed 227,000 jobs were created, compared with expectations for a rise of 200,000, while October’s hurricane-distorted number was revised up.
Markets now imply an 85% chance of a quarter-point cut at the Fed’s Dec. 17-18 meeting, up from 68% ahead of the jobs figures, and markets have a further three cuts priced in for next year.
The next test is Wednesday’s U.S. inflation report.
The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, rose 0.2% to 106.16, with the euro down 0.15% at $1.0552.
U.S. Treasury yields rose as traders waited to see whether stubbornly high price pressures could derail expectations for a Fed rate cut next week. The yield on benchmark U.S. 10-year notes rose 5 basis points to 4.203%, from 4.153% late on Friday..
In Asian markets, Chinese stocks and bonds rallied after China’s Politburo was quoted as saying that the country will adopt an “appropriately loose” monetary policy next year, rather than a “prudent” one, marking the first time it has changed the wording of its stance in around 14 years.
“With geopolitical uncertainty high and conflicting signals from hard and soft data, monetary policy remains the only game in town to support economic activity, especially in the absence of strong political leadership in Paris and Berlin,” said Barclays economist Christian Keller.
Geopolitical concerns lifted both oil and gold.
Spot gold gained 1.1% to $2,662.98 per ounce, and U.S. gold futures settled 1% higher at $2,685.50.
Oil prices rose over 1%, with Brent futures settling up 1.4% at $72.14 per barrel. U.S. crude finished up 1.7% at $68.37.
“Events in Syria over the weekend could impact the crude market and increase the geopolitical risk premium on oil prices in the weeks and months to come amid yet more instability in the Middle East region,” said Jorge Leon, Rystad Energy’s head of geopolitical analysis.
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Additional reporting by Wayne Cole in Sydney; Editing by Leslie Adler and Stephen Coates
Our Standards: The Thomson Reuters Trust Principles.
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