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Stock prices move close to record highs as bond yields fall

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New York / London — The dollar rose as investors accepted the message that simple monetary policy and rising inflation at major central banks would be temporary, with major US, European and global stock indexes recorded on Friday. It remained near the high price.

The European Central Bank also boosted growth and inflation forecasts on Thursday, boosting European sentiment as the European Central Bank has so far promised steady stimulus.

The ECB’s forecast raised the STOXX Europe 600 index across all regions by 0.68%, hitting a daytime high and a record high of 457.64.

The MSCI World Equity Index, a global benchmark that tracks equities in 50 countries, fell 0.03% to near breakeven after previously hitting a daytime high.

Wall Street stocks were also seen near Breakeven as investors relocated their portfolios to tech stocks in May after ignoring data showing a year-on-year inflation surge to 5.0%.

Inflation data has surprised many investors, but so far, equities have responded that equities are preferable to bonds in an inflationary environment, said Rick Meckler, a partner at Cherry Lane Investments in New Vernon, NJ. ..

He said investors are enthusiastic about tech stocks because they don’t use raw materials and are more productive than other sectors.

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“In the end, there are concerns that a transition from equities to bonds could occur. But for now, the pre-conversion stage where bonds aren’t yielding enough to scare people out of equities. “It seems to be in,” Meckler said.

The Dow Jones Industrial Average fell 0.17%, the S & P 500 fell 0.01%, and the Nasdaq Composite index rose 0.1%.

Overnight in Asia, MSCI’s widest index of non-Japanese Asia-Pacific equities rose 0.3%.

Yields on 10-year Treasuries rose 0.6 basis points to 1.4653% after the previous decline, which set the benchmark for the largest weekly decline in the year.

Eurozone bond yields followed government bonds. Benchmark Germany’s 10-year bond fell 3 basis points to -0.28%, set for the highest week of the year. Yield is inversely proportional to price.

Lower expectations that rising inflation could lead to an early tightening of the Fed helped flatten the US yield curve, between the narrowest 10-year and 2-year yields since late February on Friday. Showed the spread.

Yields could rise again as the economy resumes from the blockade of the coronavirus.

Jeremy Gut, Investment Manager at Unigestion, said: “We expect bond yields to rise as consumers push further.”

The euro and pound sterling fell against the dollar as investors bet that interest rates would stay lower in Europe longer.

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The dollar index rose 0.57% and the euro fell 0.61% to $ 1.2095. The Japanese yen fell 0.40% against a greenback of 109.76 per dollar.

Oil prices have risen to their highest levels in years as rising vaccination rates have lifted pandemic restraints, and are heading for the third straight week of rising global demand outlook.

Brent crude oil futures rose 32 cents to $ 72.84 a barrel. US crude oil futures rose 60 cents to $ 70.89 a barrel.

(Report by Herbert Rush, additional report by Tom Wilson in London, Andrew Galbraith in Shanghai, Shri Navaratnam, Kim Coghill, Elaine Hardcastle, and Diane Kraft edited by Sujata Lao)

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Stock prices move close to record highs as bond yields fall

https://financialpost.com/pmn/business-pmn/stocks-hover-near-record-highs-as-bond-yields-slide Stock prices move close to record highs as bond yields fall

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