WASHINGTON- Global equity markets wavered on Tuesday as a new month saw investors weigh strong earnings from big-name US companies against mixed economic data and inflation worries.
While US job openings increased to near record highs in December, a measure of US manufacturing activity fell to a 14-month low in January amid an outbreak of COVID-19 infections, supporting views that economic growth lost steam at the start of the year.
A pan-European equity index rose 1.28 percent while Japan’s blue-chip Nikkei rose 0.28 percent, with MSCI’s world stock index up 0.85 percent after hitting its highest in over a week.
But US indexes wavered before ending the session higher, with the Dow Jones Industrial Average rising 0.78 percent, the S&P 500 gaining 0.69 percent, and the tech-heavy Nasdaq Composite adding 0.75 percent.
US Federal Reserve policymakers appeared to confirm on Monday that interest rates would rise in March, but spoke cautiously about what might follow.
Australia’s central bank also weighed in on Tuesday. It ended its A$275 billion ($194.40 billion) bond-buying campaign as expected, but pushed back hard on market rate-hike bets.
World markets earlier had wobbled and drifted lower as growing investor anxiety over potential US central bank swifter rate-hikes seem imminent. Global equities in January had their worst month since March 2020, at the height of the initial wave of the pandemic, Deutsche Bank research showed.
Money markets price roughly five quarter-point Fed rate increases this year, but the latest comments have sown some doubt.
“Investors are digesting the price action from last month. There was a broad re-pricing of stocks and bonds as investors took note of the Fed’s hawkish pivot to raising rates more quickly from allowing the economy to run hot and leaving rates at close to zero,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance. – Reuters
