Online Reporter
LONDON/TOKYO. — Investors cashed out of highly valued global stocks on Friday and the dollar headed for its biggest weekly drop in a month ahead of a crucial week for markets that includes Donald Trump’s tariff deadline and key central bank meetings.
MSCI’s global equity index retreated from an all-time high and was 0,2 percent lower in early European trading, while Japan’s Topix index ended the day 0,9 percent lower after rising to a record on Thursday. Europe’s STOXX 600 share index also fell 0,5 percent in early trade. Ahead of the August 1 deadline for US trade deals with Europe and China, stock markets have been buoyed up by firm US economic data and framed the risk of tariffs hitting growth as a reason to expect Federal Reserve rate cuts.
”Higher (US) inflation will, in time, result in weaker demand and weaker investment,” UBS Wealth Management economist Dean Turner said. Van Luu, head of solutions strategy, fixed income and foreign exchange at Russell Investments, said he was waiting for a buying opportunity in US Treasuries for this reason.
”US data looks astonishingly resilient,” he said, but this likely reflected a spending rush before tariffs pushed business input costs and retail sticker prices higher. The past week saw US trade agreements with Japan, Indonesia and the Philippines, while deal talks continued with South Korea. Next week brings the next Fed interest rate meeting, the closely watched monthly payrolls report, and earnings from Amazon, Apple, Meta and Microsoft.
Trump has kept up pressure on Fed Chair Jerome Powell to cut rates after a rare presidential visit to the central bank on Thursday, although he said he did not intend to fire Powell, as he has frequently suggested he would. US 10-year Treasury yields were steady at 4,41 percent while two-year yields, which track monetary policy bets, were also flat at 3,923 percent. Robust earnings from Google parent Alphabet took Wall Street’s Nasdaq to a record high on Thursday, but futures trading signalled the tech-heavy index would flatline at the start of cash trading in New York. — Reuters.
