“S&P 500” and “Nasdaq 100” contracts jumped by 0.2% in Asian trading, after the basic indices closed at their historical levels supported by strong quarterly results, while “Apple” stock jumped after presenting promising revenue expectations.
Chris Zaccarelli of Northlight Asset Management said: “Stocks can continue to rise even in light of rising energy and inflation, as long as the economy continues to grow and corporate profits increase.”
However, this optimism collides with worrying data, as the personal consumption expenditures index, the Federal Reserve’s preferred measure, jumped by 0.7% last month, the highest level since 2022. Bets are increasing that the European Central Bank will raise interest rates in June unless the energy crisis subsides.
Michael Ball, a macroeconomic strategist at Bloomberg, said: “The oil shock is clearly visible in currencies and bonds, yet high-risk assets in America are trading as if the damage will be limited. The sustainability of this situation is one of the most important debates right now.”
In the markets, West Texas Intermediate crude rose 0.6% to $105.70, amid Trump’s adherence to the naval blockade of Iran. The dollar stabilized after the worst monthly performance since June, and the yield on ten-year Treasury bonds rose to 4.39%, while gold stabilized near $4,630 per ounce.
As for Tokyo, the yen fell slightly to 157.18 against the dollar after Japanese intervention last week, amid warnings that its strength is unlikely to be sustained with negative interest rates and high energy costs continuing. (the East)
