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Wall Street stocks gain as investors take heart from Fed minutes

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Wall Street shares extended gains on Wednesday after minutes from the Federal Reserve’s latest policy meeting suggested the U.S. central bank could ease its pressure to raise interest rates.

The S&P 500 index rose 0.6 percent in mid-afternoon trading in New York, while the Nasdaq Composite, which is full of technology companies sensitive to changes in interest rates, rose 1 percent after the previous day’s close. went. 1.4 percent higher.

The measures came as minutes of the U.S. central bank meeting in early November said a “substantial majority” of officials quickly favored slowing the pace of rate hikes — even as some warned monetary policy could tighten more next year. have to tighten than expected.

In government bond markets, the yield on the 10-year US Treasury – viewed as a measure of global borrowing costs – fell 0.05 percentage point to 3.71 percent. The policy-sensitive two-year interest rate fell by 0.04 percentage point to 4.48 percent. Both yields, which are inversely related to debt instrument prices, were more or less flat leading up to the minutes’ release.

The dollar fell further after the minutes’ release, with an index tracking the US currency losing 0.9 percent against six counterparts.

Stocks and bonds are under pressure this year as the Fed and its international peers tighten monetary policy to avoid rapid price increases. Even after lower-than-expected US inflation for October, markets are pricing in expectations of interest rates above 5 percent in June in the world’s largest economy.

Elsewhere on Wednesday, oil prices continued to fall, with international benchmark Brent crude falling 4 percent to below $85 a barrel.

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Oil prices took new losses as global demand concerns surfaced in a disappointing report from US purchasing managers. S&P Global US’s November composite PMI, which takes into account the services and manufacturing sectors, reached a three-month low of 46.3, indicating the rate at which business conditions are deteriorating.

“Business conditions deteriorated in the US in November. . . production and demand growth slowed at an annual rate of 1 percent,” said Chris Williamson, chief business economist at S&P Global Market Intelligence. fulfills the contract of the economy.”

The PMI report for the euro area also pointed to a continued slowdown in business activity. “The [eurozone] Data suggests that the outlook has improved slightly and some tail risks are likely to ease, but are still consistent with a meaningful downgrade,” Barclays said in a note to clients.

The reports come as analysts worry about China introducing a massive lockdown as it battles the Covid-19 outbreak.

The European stock index Stoxx 600 closed 0.6 percent higher. In Asia, Hong Kong’s Hang Seng index rose 0.6 percent, while China’s CSI 300 rose 0.1 percent. Elsewhere, South Korea’s Kospi rose 0.5 percent.

Willem Sales, global chief investment officer at private bank HSBC, said he was bearish on equities overall, but hopeful of further support and gradual easing for the country’s recently battered real estate sector. “Dipped” in retail, hospitality and airline stocks. of zero covid policies in the second quarter of 2023.

If implemented, the measures would reduce the likelihood of a full-blown asset crisis and boost economic growth, Sales said. “Couple that with very attractive valuations, and other investors are underweight, and [China] There is a good risk reward.

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Source: news.google.com

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