© Reuters. FILE PHOTO: A silhouette of a man holding an umbrella as he walks in front of an electric screen showing the exchange rate of the Japanese yen against the US dollar and the Nikkei stock average in Tokyo, Japan July 14, 2022.
Written by Stephen Kolb
NEW YORK (Reuters) – U.S. stocks jumped on Monday, following the lead of their overseas peers, as strong earnings and a policy reversal from Britain’s new finance minister boosted investors’ appetite for risk.
All three major US stock indexes rose through the starting gate with sharp gains, while Treasury yields slumped and the dollar lost ground.
“More and more economists are embracing a recession,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. “This market has ruled out the worst that could happen – a global recession.”
“There is another seasonal factor,” Cardillo added. “Usually when the market discounts everything – and I think it was – usually (the last months of the year) it’s positive for the stock market.”
Stocks braced for a strong open after new UK finance minister Jeremy Hunt scrapped Prime Minister Liz Truss’s proposed tax cuts and curbed its energy subsidies, while Bank of America Corp (NYSE:) reported third-quarter results that beat consensus, after benefiting from a wave of rising interest rates. from the Federal Reserve.
It rose 522 points, or 1.76%, to 30,156.83 points. It rose 93.95 points, or 2.62%, to 3,677.02 points. It added 337.59 points, or 3.27%, to 10,658.98 points.
European stocks rose on the back of the UK’s fiscal policy reversal. ()
“This has cleared some clouds, but it does not raise the political risks for this government to remain in power for an extended period of time,” Cardillo said.
Meanwhile, the easing of the yuan affected Asian markets.
The pan-European index rose 2.11% and the MSCI gauge of stocks worldwide rose 2.15%.
Emerging market stocks rose 0.42%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.1% lower, while losing 1.16%.
Treasury prices rose, tracking similar moves in the UK bond market, pushing Treasury yields down for the first time in three days. [US/]
The benchmark 10-year bond recently rose 11/32 in price to 3.961% from 4.006% late Friday.
The price of the 30-year bond last rose 5/32 to 3.9651% from 3.975% late Friday.
The strength of the euro and the pound sterling caused the dollar to lose against a basket of major global currencies.
It fell 0.88 percent, with the euro rising 0.82 percent to $0.9799.
The Japanese yen strengthened 0.01% against the dollar at 148.74 per dollar, while the British pound was last traded at $1.1416, up 2.20% on the day.
China’s continued loose monetary policy helped offset recession fears, which pushed up crude oil prices. [O/R] ()
It rose 0.88% to $86.36 a barrel and was last seen at $92.27, up 0.7% on the day.
A weak dollar has supported gold prices. ()
It added 1.3% to $1,663.10 an ounce.
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