Global stocks rose and the dollar dipped on Friday after US Federal Reserve officials said there would be no imminent move to tighten monetary policy in the world’s biggest economy.
The bounce, extending a late recovery in the prior session, interrupted a three-day rout for stocks globally, amid market jitters over accelerating US inflation.
The MSCI World Index, a broad gauge of equity markets globally, was up 0.4 per cent in early European trading, adding to Thursday’s 0.4 per cent gains after a loss of more than 4 per cent since the start of the week.
The STOXX Europe 600 Index was up 0.3 per cent at 12.27am UAE time, giving back some of its early gains, while the FTSE 100, Europe’s biggest index, was up 0.6 per cent.
The gains followed overnight strength in Asia, where Tokyo’s Nikkei jumped 2.3 per cent, while MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.8 per cent and Chinese blue chips rose 2.4 per cent.
US stock futures pointed to a higher open on Wall Street, with S&P 500 futures up 0.5 per cent and its Nasdaq peer up 0.8 per cent.
After a higher-than-expected inflation print had spooked markets earlier in the week, Fed official Christopher Waller signalled overnight that rates would not rise until policymakers either see inflation above target for a long time or excessively high inflation.
“From 2004 to 2008, the Fed raised rates from 1 to 5.25 per cent. However, the massive public and private debt levels limit the Fed in how much interest rates can increase this time without too much damage to the overall economy,” Louise Dudley, global equities portfolio manager, at the international business of Federated Hermes, said.
With so-called “growth” stocks, those expected to post higher-than-average returns, trading on higher valuations than their more staid peers, Mr Dudley said now was the time to change tack.
The massive public and private debt levels limit the Fed in how much interest rates can increase this time without too much damage to the overall economy
“Stocks with more attractive valuations and slower growth will do well in a higher interest rate environment. Investors will do well focusing on valuation this year even if interest rates do not surprise on the upside.”
Looking ahead, traders will wait for the release of a fresh batch of US data including April retail sales, industrial production and capacity utilisation, while the Dallas Federal Reserve president is also set to speak.
In Europe, meanwhile, the European Central Bank is set to publish the accounts of its April meeting.
Benchmark 10-year Treasury yields were down fell by nearly 4 basis points overnight and eased further to trade at 1.6420 per cent.
After holding steady in Asia overnight, the US currency extended losses against a basket of its major peers, with the dollar index down 0.3 per cent at 90.46, taking a breather after recent strong gains.
“Treasury yields are higher this week, but only by 5bp, which is less of a rise than in Europe, and a pretty modest reaction to the CPI data,” Societe Generale analyst Kit Juckes said in a note.
“Either the US inflation uptick is temporary, or the Fed is dangerously complacent. Either way, we’re going to see tolerance of higher inflation tested further in the months ahead.”
CHELSEA SQUAD
Arrizabalaga, Bettinelli, Rudiger, Christensen, Silva, Chalobah, Sarr, Azpilicueta, James, Kenedy, Alonso, Jorginho, Kante, Kovacic, Saul, Barkley, Ziyech, Pulisic, Mount, Hudson-Odoi, Werner, Havertz, Lukaku.
ICC Awards for 2021
MEN
Cricketer of the Year – Shaheen Afridi (Pakistan)
T20 Cricketer of the Year – Mohammad Rizwan (Pakistan)
ODI Cricketer of the Year – Babar Azam (Pakistan)
Test Cricketer of the Year – Joe Root (England)
WOMEN
Cricketer of the Year – Smriti Mandhana (India)
ODI Cricketer of the Year – Lizelle Lee (South Africa)
T20 Cricketer of the Year – Tammy Beaumont (England)
GOLF’S RAHMBO
- 5 wins in 22 months as pro
- Three wins in past 10 starts
- 45 pro starts worldwide: 5 wins, 17 top 5s
- Ranked 551th in world on debut, now No 4 (was No 2 earlier this year)
- 5th player in last 30 years to win 3 European Tour and 2 PGA Tour titles before age 24 (Woods, Garcia, McIlroy, Spieth)
Roll of honour 2019-2020
Dubai Rugby Sevens
Winners: Dubai Hurricanes
Runners up: Bahrain
West Asia Premiership
Winners: Bahrain
Runners up: UAE Premiership
UAE Premiership
}Winners: Dubai Exiles
Runners up: Dubai Hurricanes
UAE Division One
Winners: Abu Dhabi Saracens
Runners up: Dubai Hurricanes II
UAE Division Two
Winners: Barrelhouse
Runners up: RAK Rugby
Seven tips from Emirates NBD
1. Never respond to e-mails, calls or messages asking for account, card or internet banking details
2. Never store a card PIN (personal identification number) in your mobile or in your wallet
3. Ensure online shopping websites are secure and verified before providing card details
4. Change passwords periodically as a precautionary measure
5. Never share authentication data such as passwords, card PINs and OTPs (one-time passwords) with third parties
6. Track bank notifications regarding transaction discrepancies
7. Report lost or stolen debit and credit cards immediately
The struggle is on for active managers
David Einhorn closed out 2018 with his biggest annual loss ever for the 22-year-old Greenlight Capital.
The firm’s main hedge fund fell 9 per cent in December, extending this year’s decline to 34 percent, according to an investor update viewed by Bloomberg.
Greenlight posted some of the industry’s best returns in its early years, but has stumbled since losing more than 20 per cent in 2015.
Other value-investing managers have also struggled, as a decade of historically low interest rates and the rise of passive investing and quant trading pushed growth stocks past their inexpensive brethren. Three Bays Capital and SPO Partners & Co., which sought to make wagers on undervalued stocks, closed in 2018. Mr Einhorn has repeatedly expressed his frustration with the poor performance this year, while remaining steadfast in his commitment to value investing.
Greenlight, which posted gains only in May and October, underperformed both the broader market and its peers in 2018. The S&P 500 Index dropped 4.4 per cent, including dividends, while the HFRX Global Hedge Fund Index, an early indicator of industry performance, fell 7 per cent through December. 28.
At the start of the year, Greenlight managed $6.3 billion in assets, according to a regulatory filing. By May, the firm was down to $5.5bn.
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UAE currency: the story behind the money in your pockets
Stamp duty timeline
December 2014: Former UK finance minister George Osbourne reforms stamp duty, replacing the slab system with a blended rate scheme, with the top rate increasing to 12 per cent from 10 per cent:
Up to £125,000 - 0%; £125,000 to £250,000 – 2%; £250,000 to £925,000 – 5%; £925,000 to £1.5m: 10%; Over £1.5m – 12%
April 2016: New 3% surcharge applied to any buy-to-let properties or additional homes purchased.
July 2020: Rishi Sunak unveils SDLT holiday, with no tax to pay on the first £500,000, with buyers saving up to £15,000.
March 2021: Mr Sunak decides the fate of SDLT holiday at his March 3 budget, with expectations he will extend the perk unti June.
April 2021: 2% SDLT surcharge added to property transactions made by overseas buyers.
