Global Stocks Growth – Positive Expectations
Wall Street futures and global stocks improved on Wednesday. After Jerome Powell, chairman of the Federal Reserve, said U.S. monetary policy would return to normal; Also, interest rates may rise earlier than planned. Frankfurt and London opened up. Tokyo, Shanghai, and Sydney advanced.
The Wall Street S&P 500 Index has risen 0.9% since then; Which Powell said politics would most likely return to normal; While bond purchases and other incentives are reduced. Addressing the Senate Banking Committee, Powell noted that to reduce inflation to a maximum of four decades; Consequently, ultra-low rates may rise earlier than planned. Wall Street now has a better understanding of how the Federal Reserve will implement policy normalization. Investors received an obvious signal to buy the downturn. The FTSE 100 rose to 7,529.16, up 0.5% overall. The DAX rose to 15,941.81 and advanced 1.1%. The CAC 40 rose to 7,183.38, totaling 1%.
Dow Jones Industrial Average and S&P 500 index futures rose 0.2% on Wall Street. On Tuesday, the five-day series of S&P 500 decline was broken and increased by 0.9%. The Dow won by 0.5%; Nasdaq Composite increased by 1.4%. The Shanghai Composite Index rose to 3,595.12, up 0.8% overall. The Nikkei 225 rose to 28.765.66, totaling 1.9%, with the Hang Seng reaching 24.354.68 and up 2.6%. Kospi climbed to 2.972.48 and added 1.5%. The S&P-ASX 200 rose to 7,438.90, up 0.7%. Sensex opened at 61.102.89 and saw a 0.8% gain. New Zealand stepped back; Southeast Asian markets have risen.
Stocks and Plans
Investors were confused in mid-December; When Fed announced accelerating tips to decrease the stimulus that pushes up share prices. They are trying to figure out how the world’s largest financial markets and economies react this year.
It is worth noting that the World Bank has cut its global economic growth forecast from 4.3% to 4.1% this year. In part due to supply chain disruptions, which led to inflation. According to the data, the world economy grew by 5.5% last year. On Wednesday, the U.S. government is due to announce consumer inflation. The wholesale price index will follow this on Thursday.
In the energy markets, the price of U.S. oil reached $81.24 per barrel and increased by 2 cents in total. The contract was $81.22 and increased by $2.99. Brent oil lost 11 cents in London; The total was $83.61 per barrel. The dollar fell to 115.34 yen on Tuesday. The euro fell to $1.1364.
Shares and Analysts Expectations
The Bank of Japan has been more optimistic about its economy than it has been for the past eight years. This has boosted investor confidence; That the recent rise in coronavirus infections will not affect the country recovering from the pandemic. China Consumer Price Index rose 1.5% in December. Factory prices increased by 10.3% compared to the same period last year.
Analysts mention investors should remember that stock exchanges are likely to be elusive over the next few days. This will be mainly due to the publication of inflation data. However, inflation is not the main factor that the Fed considers when deciding on monetary policy. Due to sharp demand recovery and supply chain disruptions; Consumer prices rose rapidly last year. Experts predict that the inflation rate, published on Wednesday, will be higher, supporting the Fed’s current strategy.
