LONDON :European shares and U.S. stock futures rebounded on Friday. This recovery followed a week of heavy losses, marked by a stocks inflation bounce. Global equities had tumbled almost 2 percent, but the dollar regained ground against the yen. #StocksInflationBounce
There was little major reaction to data showing the U.S. personal consumption expenditures index cooled slightly. This led to a stocks inflation bounce. The index, the Fed’s preferred inflation measure, dropped to 2.5 percent year-on-year in June. Traders’ bets on Fed rate cuts this year remained intact.
S&P 500 futures rose 0.72% after the index fell for a third day, marking a 1.9% weekly drop so far.
Futures for the tech-laden U.S. Nasdaq index – which has slumped 7 per cent over the past two weeks – rose 1 per cent.
Meanwhile, Europe’s continent-wide STOXX 600 index rose 0.58 per cent and was on track to end the week 0.4 per cent higher after losing 2.7 per cent last week.
Equity markets – which had been trading at all time highs – have seen old favourites lose some allure and others pick up over the past two weeks after some cooler U.S. economic data sparked hopes that the Federal Reserve would soon be cutting rates. #StocksInflationBounce
Investors have snapped up smaller companies that are more closely tied to the economy and affected by borrowing costs. At the same time, they have ditched popular artificial intelligence plays such as Nvidia, helping to pull down global stocks by 1.7 per cent this week.
“The way we can describe (this week) is an unwinding of consensus long positions in growth and AI stocks, and an unwinding of consensus long carry positions,” said Max Kettner, chief multi-asset strategist at HSBC.
