STOCKS on global indexes rose yesterday, with the Nasdaq and growth names leading gains on Wall Street, while the US dollar strengthened on talk of more sanctions against Moscow following international outrage over Ukraine civilian killings.
Adding to investor caution, the 2-year/10-year Treasury yield curve remained inverted, signalling to some market watchers that a recession may follow in one to two years.
The deaths in Bucha, outside Kyiv, are likely to galvanise the US and Europe into additional sanctions against Moscow over its invasion of Ukraine. The prospect of more sanctions boosted oil prices which jumped over 3%.
The dollar gained for the third straight session as investors sought safety in the greenback.
“The dollar is bouncing higher as geopolitical developments have darkened clouds over the global economy,” said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington. The Kremlin, which calls its action a “special operation,” denied accusations related to the murder of civilians.
The US currency also remained buoyed by a strong non-farm payrolls report for March that backed expectations for a half of a percentage point rate hike by the Federal Reserve next month.
The dollar index rose 0.369%.
The euro, which has been pressured by economic worries since the invasion of Ukraine, fell 0.8% versus the dollar to US$1.0970. Against sterling, the euro fell 0.7% at 83.64 pence.
On Wall Street, Twitter shares surged 27.1% on news that Tesla Inc Chief Executive Officer Elon Musk has built a 9.2% stake in Twitter Inc.
Other big growth shares also gained, with the technology and consumer discretionary giving the S&P 500 its biggest boost.
“Investors are not willing to give up the names that have brought them to this point. They’ve been the favorites for a lot of investors and they’re not ready to move on to something else,” said Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago.
US Treasury yields
The Dow Jones Industrial Average rose 103.61 points, or 0.3%, to 34,921.88, the S&P 500 gained 36.78 points, or 0.81%, to 4,582.64 and the Nasdaq Composite added 271.05 points, or 1.9%, to 14,532.55.
The pan-European STOXX 600 index rose 0.84% and MSCI’s gauge of stocks across the globe gained 0.86%.
In the US Treasury market, the yield on 10-year Treasury notes was last at 2.404% while the 2-year note yield was at 2.420%.
The jump in US bond yields has boosted the dollar, particularly against the yen as the Bank of Japan acted repeatedly last week to keep bond yields near zero.
The US Commerce Department said factory orders fell 0.5% in February, in line with expectations. Data for January was revised slightly higher to show orders rising 1.5% instead of 1.4% as previously reported.
Brent crude jumped US$3.14, or 3%, to settle at US$107.53 a barrel. US West Texas Intermediate crude rose US$4.01, or 4%, to settle at US$103.28 a barrel. – April 5, 2022
