By Herbert Lash and Huw Jones
NEW YORK/LONDON (Reuters) – A gauge of global equity markets rose on Friday, with European shares hitting new highs on strong earnings, while the dollar eased a bit but was on track for its biggest weekly gain since late August.
Gold prices retreated after a six-session winning streak after data on Wednesday showing a surge in U.S. consumer prices bolstered the metal’s appeal as a hedge against inflation.
The 6.2% year-over-year rise in inflation in October, the strongest advance since November 1990, gave traders of U.S. Treasuries pause as they assess whether the Federal Reserve will be forced to raise interest rates sooner rather than later. [US/]
Crude oil futures were poised to end the week with their third consecutive weekly fall after sharp swings driven by the dollar’s recent strengthening.
On Wall Street, the mega cap stocks of Microsoft Corp, Meta Platform, formerly listed as Facebook, and Google parent Alphabet Inc led stocks higher.
A case can be made that the “big tech” stocks will react better to rising rates than cyclicals, said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.
“There’s a feeling from the users and purchasers of tech that they can’t be left behind, that they always need to be on the cutting edge,” he said. “That means they have more consistent and steadier growth regardless of the economic environment.”
MSCI’s all-country world index, up 0.56%, and the broad STOXX Europe 600 index, up 0.28%, advanced to new peaks, as did France’s CAC40 index and the German bourse’s DAX index, before it pared gains.
On Wall Street, the Dow Jones Industrial Average rose 0.42%, the S&P 500 added 0.62% and the Nasdaq Composite advanced 0.83%.
Growth rose 0.97%, outperforming a -0.20% slide in value stocks.
Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities, said inflation a risk to watch, but it is still in the future.
“Stock prices will face a major crash only if the Federal Reserve turns out to be completely wrong in its assessment and is forced to raise interest rates rapidly. That’s not where we are now,” Fujito said.
In Europe, euro zone money markets priced in two full European Central Bank rate hikes by the end of next year. A Reuters poll showed the Bank of England is expected to be the first major central bank to raise rates, probably next month.
Tesla Inc Chief Executive Elon Musk sold more shares of the electric carmaker, regulatory filings showed on Friday.
The dollar index, which tracks the greenback versus a basket of six currencies, fell 0.013% to 95.15.
The euro was down 0.06% at $1.1443, while the yen traded down 0.11% at $113.9300.
The yield on 10-year U.S. Treasury notes traded near break-even at 1.5681%.
German 10-year yields slid 2.9 basis points to -0.253%.
“Directionally, the line of least resistance is for lower bond prices and higher yields and the stock market does not seem to care that much,” said Mike Hewson, chief markets analyst at CMC Markets.
Oil prices fell. Brent crude lost $0.65 to $82.22 a barrel. U.S. crude was off $0.66 at $80.93 a barrel.
Gold prices traded near break-even.
(Additional reporting by Hideyuki Sano and Dhara Ranasinghe; Editing by Andrei Khalip, Mark Potter and Dan Grebler)