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Stocks surge, dollar sags as investors digest Fed, Evergrande

EconomySep 23, 2021 06:26PM ET
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2/2 © Reuters. FILE PHOTO: Investors look at computer screens showing stock information at a brokerage house in Shanghai, China, April 21, 2016. REUTERS/Aly Song//File Photo 2/2

By Lewis Krauskopf and Marc Jones

NEW YORK/LONDON (Reuters) - World stock markets rallied on Thursday and the U.S. dollar retreated from one-month highs as worries faded about contagion from China Evergrande and as investors digested the Federal Reserve's plans for reining in U.S. stimulus.

Wall Street's main indexes all ended up at least 1% following solid advances in European markets.

MSCI's gauge of stocks across the globe jumped 1.01%, its biggest percentage rise in a month and for a third straight session of gains that brought it all the way back from Monday, when it posted its biggest percentage drop in two months after fears linked to debt-laden property group Evergrande.

It was a case of “unwind of the fear from what happened in China. Markets got over-sold and pessimistic very quickly and then you have basically seen a buy-the-dip mentality,” said Keith Lerner, co-chief investment officer at Truist Advisory Services.

Evergrande shares jumped 18% ahead of a key debt payment deadline. Gold prices dropped as safe-haven trades faded.

Investors were still mulling implications from the Fed's policy statement on Wednesday that it should begin reducing monthly bond purchases as soon as November and signalled interest rate increases may follow more quickly than expected.

“In some ways, the Fed had prepared investors that they were going to taper and somehow just getting that news out there even if some people perceived it as more hawkish is like a sigh of relief,” Lerner said.

On Wall Street, the Dow Jones Industrial Average rose 506.5 points, or 1.48%, to 34,764.82, the S&P 500 gained 53.34 points, or 1.21%, to 4,448.98 and the Nasdaq Composite added 155.40 points, or 1.04%, to 15,052.24.

The pan-European STOXX 600 index rose 0.93%.

Norway's central bank raised its benchmark interest rate and said it expects to hike again in December, joining a growing list of nations moving away from emergency-level borrowing costs. Norway's crown strengthened versus the euro to its highest since mid-June.

In other currency trading, the dollar index fell 0.428% after hitting a one-month high and the euro rose 0.45% to $1.1739. The Japanese yen weakened 0.46% at 110.31 per dollar.

Sterling was last trading at $1.3722, up 0.71%, after the Bank of England said two policymakers had voted for an early end to government bond buying and markets brought forward expectations of an interest rate rise to March.

Benchmark U.S. 10-year notes last fell 30/32 in price, pushing the yield to 1.4336%, its highest since early July, from 1.331% late on Wednesday. Key Euro area bond yields also climbed after hawkish signals from central banks.

Oil prices rose, supported by growing fuel demand and a draw in U.S. crude inventories as production remained hampered in the Gulf of Mexico after two hurricanes.

U.S. crude settled up 1.5% at $73.30 per barrel and Brent settled at $77.25, up 1.4% on the day.

Spot gold dropped 1.3% to $1,745.29 an ounce.

Stocks surge, dollar sags as investors digest Fed, Evergrande
 

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Comments (8)
Aziz Adnan
Aziz Adnan Sep 23, 2021 5:10PM ET
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Dane Leverett
Dane Leverett Sep 23, 2021 1:34PM ET
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I want to trade more this period, but i need a professional trader to help me through can you drop Declan handle?
Vener Belykh
Vener Belykh Sep 23, 2021 1:15PM ET
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Rick Miller
Rick Miller Sep 23, 2021 2:30AM ET
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I agree.."jitters"..bunch of nonsense..you know..over half of all investors HAVE NO CLUE ABOUT ANY OF THIS CRAP WHEN IT HAPPENS..oh "markets down on Tuesday due to COVID-19 fears"..then Wed.."COVID-19 fears gone until Thursday.. market bullish"..then it's "Tesla bearish today as Elon Musk Tweeted he Stubbed his toe in the bathroom."..I mean FOR GOD SAKES NOBODY TRADES BASED ON THIS INFORMATION!..THE TRUTH IS..the BIG MONEY is sitting in options trading..once bets (let's call it what it is) are LONG..the pull the accounts SHORT to SCREW AND MARGIN CALL AS MANY AS POSSIBLE..they're out..now betters jump in SHORT..then THEY DO THE SAME ON THE LONG SIDE..RINSE AND REPEAT..always go long longer or THEY LOSE 401K INVESTORS.. that's all..DONT BE THE BIG FISH BETTING TOO MUCH AT ONE TIME OR YOU'LL BE THEIR TARGET..but I highly DOUBT..ANY of us got THAT kind of cash..lol..but that's why you get KILLED in low volume trading arenas.. because THATS where ANY BET GETS PULLED THE OPPOSITE DIRECTION.
Darrell Peterson
Darrell Peterson Sep 23, 2021 1:04AM ET
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jitters , it's all about jitters , a investor class of neurotics , what a headline lol .
Matt Novakovich
Matt Novakovich Sep 23, 2021 12:18AM ET
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apple is up 250% but 3% discount Monday,,, so a good deal
Todd Gray
Todd Gray Sep 22, 2021 11:17PM ET
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Twaddle. Evergrande and their investors are already hedged. There's no black swan here. Their prepared for uncertainty.
yan yan
yan yan Sep 22, 2021 10:23PM ET
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china something something evergreen something something but just sell so I can buy cheaper
Jouni Matero
Jouni Sep 22, 2021 10:23PM ET
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Nice trading plan to lose your money before xmas 👍👍
 
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