MSCI’s world share index was stable after hitting an all-time high on Thursday, boosted by a frenzy for AI stocks that lifted chipmaker Nvidia’s valuation beyond $3 trillion earlier in the week
Global stocks hovered at a record high on Friday after the ECB cut interest rates for the first time in five years and traders waited on crucial U.S. monthly jobs data for clues about whether the Federal Reserve would soon follow.
MSCI’s world share index was stable after hitting an all-time high on Thursday, boosted by a frenzy for AI stocks that lifted chipmaker Nvidia’s valuation beyond $3 trillion earlier in the week.
Reaction in government bond markets and the euro to the European Central Bank’s widely expected decision to cut its deposit rate from a record 4% to 3.75% was tepid, although the prospect of easier borrowing conditions for households and businesses has buoyed stocks.
Europe’s broad STOXX 600 share index, which traded flat in early dealings on Friday, has advanced 1.4% this week and around 10% year-to-date.
Markets were mostly moving sideways ahead of Friday’s U.S. non-farm payrolls report that could support or derail a dominant market narrative that the jobs market is softening enough for inflation to drop consistently.
Economists expect the U.S. economy added 185,000 new jobs last a month, a relatively modest gain that traders will likely celebrate after data on Wednesday showed U.S. job openings dropped to their lowest in over three years in April.
If we see 180,000 or a slight uptick in the unemployment rate, this rally will start again, according to Florian Ielpo, head of macro at Lombard Odier Investment Managers.
But if we see a bigger miss or a bigger beat, then the situation would be quite different. The market is trying to see whether the current slowdown in U.S. economic data is Fed- supportive or problematic for earnings, Ielpo added.
Money market pricing implies traders see the Federal Reserve reducing rates from their 23-year high of 5.25-5.5% by September, following a string of similar moves across major economies.
