Global Stocks Advance as US Recession Fears Fade: Markets Wrap
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European and US equity futures rose on Friday, building on gains in Asian stocks as traders piled into risk assets amid growing optimism that the US economy will avoid a recession. The yen is set for its worst week since May. Contracts on the Euro Stoxx 50 rose 0.3% and those on the S&P 500 added 0.2%. A slew of US data this week, from inflation to jobless claims to retail sales, has reassured investors, supporting the view that the world’s biggest economy is heading for a “Goldilocks” scenario where inflation is contained without stalling growth. Treasuries in Asia were steady after Thursday’s dip as signs of a resilient US economy in the latest data releases prompted traders to dial back bets for a jumbo September rate reduction. They are now pricing in less than a 30-basis point cut next month, with a total of 92 basis points of reduction expected for the remainder of 2024. As fears around the US economy eased, equities continued a rebound from last week’s meltdown that rattled global markets. The S&P 500 extended a six-day rally to 6.6% on Thursday, marking the best performance in such a span since November 2022. In Japan, stocks headed for their biggest weekly advance since April 2020, driven by renewed weakness for the yen. China’s central bank chief pledged further measures to support the country’s economic recovery. Alibaba Group Holding Ltd. rose as optimism over tech stocks outweighed concerns about its earnings. JD.com Inc. gained the most since March after beating net profit estimates in results released late Thursday. US officials have been trying to use higher rates to ease inflation without causing the economy to contract. Fed Bank of St. Louis President Alberto Musalem said the time is nearing when it will be appropriate to cut rates. In commodities, gold was on track for a small weekly gain. Oil edged lower as the market weighed strong US economic data and a possible attack by Iran or its proxies on Israel against a lackluster Chinese demand outlook.

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