Equity markets and Treasury yields soared gave positive sentiment on economic growth while U.S. retail sales data that was the focus of yesterday’s New York session was published with mixed readings.
The US Department of Commerce report saw the US retail sales rate for April rise to 0.9% higher than expected while the higher updated March data reading has seen sales increase 1.4% versus 0.7%.
According to LPL Financial's Chief Economist, Jeffrey Roach, there will be a recovery in economic growth in the 2nd quarter (2Q) if prices remain modest which can ease the pressure on consumers.
As a result, the stock market was seen entering a rally with the MSCI gauge of worldwide stocks closing higher 2.0% and the pan-European STOXX 600 index up 1.22%.
Turning to Wall Street, the Dow Jones Industrial average index rose 1.28%, the S&P 500 hit 1.98% and the Nasdaq Composite advanced 2.57% while IGX growth stocks jumped 2.48% while stock values jumped 1.60%.
It indirectly made the stock return some gains from last week’s selling session, which saw the Nasdaq and S&P suffer losses for 6 consecutive weeks.
Meanwhile, 10 -year Treasury yield notes rose 10.7 basis points to 2.986%.
Meanwhile, data also showed that industrial production rose 1.1% in April with manufacturing capacity utilization at its highest level since 2007.
On the other hand, Comerica Bank Chief Economist Bill Adams in his note wrote that the Federal Reserve (Fed) will raise rates by half a point at every 2 of its next policy meetings.
This is because Chairman Jerome Powell once stated that the US central bank will continue to be determined to tighten monetary policy until inflation really comes down.
The currency summary saw the dollar index fall 0.787%, retreating from its 2 -decade high against a number of other major currencies while the Euro rose 1.07% to $ 1.0543 and the Japanese Yen weakened 0.14% to 129.36 per dollar.
Ijmal on gold, meanwhile, eased as US retail sales data and expectations of an aggressive Fed rate hike overcame weak dollar support with gold futures slightly up 0.3% at $ 1,818.9.
