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07/06/24
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Global Stocks Dip on Withering Hopes of Fed Cut
On Friday, global stocks fell from all-time highs after surprisingly strong U.S. monthly jobs data dashed hopes the Federal Reserve would follow Canadian and eurozone interest rate cuts soon.
The biggest economy in the world last month added 272K new jobs, more than the 185K new hires expected by economists and upsetting investor estimates that the jobs market had eased by enough to push consumer prices down.
The regional head of research at ING, Padhraic Garvey, said it was difficult for the Fed to be close to a rate cut as there was no urgency for the Fed to cut rates as long as the labor market remains firm.
The MSCI’s world share index was weighed down by declining hopes for an imminent Fed move, and it dropped 0.2% after on Thursday hitting a record level.
The performance of Wall Street was also lackluster. The Nasdaq Composite lost 0.22%, the Dow Jones Industrial Average edged up 0.24%, and the S&P 500 was flat.
After the payrolls data money market pricing shows traders only expected the Fed to start to cut rates by Nov.
According to LSEG’s Fedwatch, U.S. interest rate futures also decreased bets of the Fed cutting rates by 0.25% in Sept. to 56%, down from about 70% on Thursday.
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