Europe boosts global stock-markets gauge to record as Wall Street slips
NEW YORK (Reuters) – Gains in European stocks, led by a bounce in Spain, helped push a gauge of global equities to an intraday record, while Wall Street edged lower after a strong rally last week.
US traders appeared to shrug off the first charges related to a probe of possible Russian interference in last year’s US election.
Paul Manafort, a former campaign manager for US President Donald Trump, and an associate were indicted by a federal grand jury on 12 counts, including conspiracy against the United States and money laundering, the federal special counsel’s office said on Monday.
In late-morning trading, the Dow and S&P 500 retreated slightly, on the heels of seven straight weeks of gains that left both indexes at record levels. The Nasdaq was modestly higher after scoring its best weekly gain in nearly a year last week.
“The Manafort news was probably what most people expected if they had to pick the person that was likely to be indicted, so I don’t think that really changed people’s perception of the political situation,” said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey. “The market has just shown an ability to just shrug off a lot political issues surrounding the Trump administration and just focus on the earnings, which for the most part have been pretty good.”
MSCI’s world equity index, which tracks shares in 47 countries, gained 0.08% to top the record hit on October 23. The index has surged 17.7% so far in 2017 and is on pace to notch its best annual performance since 2013.
Spanish markets supported European shares after an opinion poll smoothed investors’ concerns over Catalan secession. Spanish stocks were up 2.56% and set for their best day since October 5.
Spain’s benchmark 10-year bond yield last yielded 1.504%, down from 1.583% late on Friday.
The pan-European FTSEurofirst 300 index rose 0.15%. European stocks have rallied this year on a healthier economy, coupled with convincing growth in corporate earnings and a reduction in political risk.
US Treasury prices gained to start a week of policy meetings by three major central banks, a steady stream of economic data and the expected announcement of a new Federal Reserve chair.
Benchmark 10-year notes last rose 12/32 in price to yield 2.3865%, down from 2.428% late on Friday.
Trump is likely to pick Federal Reserve Governor Jerome Powell as the next head of the US central bank, a source familiar with the matter said on Monday.
Data on Monday showed US consumer spending recorded its biggest increase in more than eight years in September, likely as households in Texas and Florida replaced flood-damaged motor vehicles. But underlying inflation remained muted.
The Bank of England is widely expected to raise rates on Thursday, reversing its monetary easing following Britain’s June 2016 vote to leave the European Union, while the Federal Reserve is expected to hold rates steady. The Bank of Japan will also issue a rate decision this week.
The dollar index fell 0.24%, with the euro up 0.12% to $1.1622.