Global shares flat, US yields fall as strong earnings allay election worries
· CNA · JoinNEW YORK :Global shares were flat in choppy trading on Thursday, while U.S. Treasury yields and strong corporate results allayed worries over upcoming U.S. elections and rate cuts.
Tesla jumped 19 per cent after CEO Elon Musk provided on Wednesday a forecast for robust car sales growth next year that reassured investors.
The benchmark S&P 500 and the Nasdaq traded slightly higher, with gains in consumer discretionary stocks and losses in materials and industrials equities.
The Dow Jones Industrial Average fell 0.48 per cent to 42,310.36, the S&P 500 rose 0.11 per cent to 5,803.54 and the Nasdaq Composite rose 0.55 per cent to 18,377.64.
European shares gained 0.03 per cent, ending a streak of three consecutive losses amid positive results from companies including Renault, Unilever and Hermes. MSCI's gauge of stocks across the globe eased 0.02 per cent to 844.16.
"Markets have traded lower over the past three or four days as a bit of a pause after a huge surge, with most of the equity indexes still trading rather near their all-time highs." said Michael Farr, president and chief executive at Farr, Miller & Washington.
"Perhaps the Fed isn't going to be lowering rates quite as extensively and quickly as (investors) hope. However, the real bottom line is the economy doing OK and earnings season is coming on with reasonable gains," Farr added.
Traders are pricing in a near-92 per cent chance of a 25-basis-point cut at the Federal Reserve's November meeting, according to the CME Group's FedWatch Tool. Benchmark 10-year note yields were last down 4.4 basis points at 4.045 per cent after reaching 4.26 per cent on Wednesday, the highest since July 26.
The U.S. dollar slipped as data supported views for a slower pace of rate cuts by the Fed. The number of Americans filing claims for unemployment aid unexpectedly fell to 227,000 last week, suggesting a more resilient labor market.
The greenback weakened 0.62 per cent against the Japanese yen to 151.8. The euro was up 0.2 per cent at $1.0802, while the sterling strengthened 0.27 per cent to $1.2958.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro,fell 0.25 per cent to 104.18.
Gold prices rose to near-record highs amid safe-haven demand from persistent geopolitical concerns and as investors sought safety from close U.S. elections on Nov. 5.
Spot gold rose 0.44 per cent to $2,729.58 an ounce. U.S. gold futures rose 0.54 per cent to $2,729.00 an ounce.
Oil prices fell by about 1 per cent in volatile trade on worries that slow economic growth in Europe could reduce energy demand.
Brent futures fell 0.79 per cent to $74.38 a barrel, while U.S. West Texas Intermediate crude slipped 0.88 per cent to $70.16.
"The volatility from things like elections and geopolitical events around the globe tends to add to market volatility, but they don't tend to be significant over longer periods of time in terms of moving share prices," Farr said.
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