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Wall Street seen off record peak, dollar on losing streak

EconomyApr 30, 2021 08:01AM ET
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2/2 © Reuters. FILE PHOTO: Screen displays Nikkei share average and stock indexes outside a brokerage in Tokyo 2/2

By Carolyn Cohn

LONDON (Reuters) - Wall Street futures suggested a softer open on Friday following Thursday's record peak on strong U.S. data and earnings, while demand for risky assets put the dollar on course for its longest weekly losing streak since July.

U.S. stock futures were down 0.4% after the S&P 500 closed at an all-time high.

Data on Thursday showed U.S. economic growth accelerated in the first quarter, fuelled by massive government aid to households and businesses.

That came against the backdrop of the Federal Reserve's reassurance on Wednesday that it was not time yet to begin discussing any change in its easy monetary policy.

With just over a half of S&P 500 companies reporting earnings, about 87% beat market expectations, according to Refinitiv, the highest level in recent years.

"The Federal Reserve continues to support, Biden has this huge stimulus programme as well and the earnings season continues -- so far we have seen relatively benign as well as strong earnings," said Eddie Cheng, head of international multi-asset portfolio management at Wells Fargo (NYSE:WFC) Asset Management.

MSCI's broadest gauge of world stocks covering 50 markets dipped 0.25% but remained close to a record peak touched the previous day, up 4.9% on the month.

For both the MSCI world index and the S&P500, analysts are expecting earnings in the next 12 months to recover to above pre-pandemic levels.

In Europe, the euro STOXX index was down 0.22% and Britain's FTSE 100 was flat.

Euro zone GDP data showed a year-on-year drop of 1.8% in the first quarter, stronger than expectations of a 2% fall, though economists said the bloc was on a recovery path.

"There is increasingly bright light at the end of the tunnel," Commerzbank (DE:CBKG) analysts said.

"The speed of the vaccinations is picking up and the EU recovery fund is also finally getting off the ground."

For a graphic on Euro zone economic growth and stocks:

https://fingfx.thomsonreuters.com/gfx/mkt/bdwpkbxmzvm/EZGDP3004.PNG

New coronavirus infections in India surged to a fresh record, however, and France's health minister said the dangers of the Indian variant must not be underestimated.

"Risky assets have had quite a few wobbles within the month," said Cheng.

"We need to get used to the fact that this is not going to be a straight line."

The euro extended its bull run to a two-month high of $1.2150 in the previous session but last stood at $1.2083, down 0.29%, following the euro zone data.

"The euro is more sensitive to the European economic outlook, than to (what) happens in the U.S.", said Kit Juckes, head of FX strategy at Societe Generale (OTC:SCGLY).

Germany's 10-year Bund yield, which moves inversely to price, slipped 0.015% to -0.208%.

The dollar gained 0.25% against a basket of currencies, after hitting a two-month low on Thursday, but remained on course for a four-week losing streak, its longest since July.

The Canadian dollar hit a three-year high of C$1.2268 per U.S. unit, boosted by the Bank of Canada's tapering of its bond-buying programme and higher commodities including oil and lumber.

The dollar was steady against the yen at 108.86.

Mainland Chinese shares lost 0.8% while Japan's Nikkei also shed 0.8% on position adjustments ahead of a long weekend. Both markets will be closed through Wednesday.

Oil prices fell a dollar a barrel on concerns about wider lockdowns in India and Brazil.

Brent reached $67.56 per barrel, after reaching a high of $68.95 on Thursday, while U.S. West Texas Intermediate (WTI) fell dropped to $64.01 per barrel.

Wall Street seen off record peak, dollar on losing streak
 

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Comments (8)
Xer Zuproc
Xer Zuproc Apr 30, 2021 9:51AM ET
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impact deep! rocovering!
Xer Zuproc
Xer Zuproc Apr 30, 2021 8:57AM ET
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up they are double up! down they are doubled. keep Us Up..
Olaseinde Tofunmi
Olaseinde Tofunmi Apr 30, 2021 3:03AM ET
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Always up
Dave Jones
Dave Jones Apr 30, 2021 2:41AM ET
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if everything is awesome with record GDP and earnings why are interest rates 0% and the fed doing QE infinity and 1 trillion in repo every night?
Dave Jones
Dave Jones Apr 30, 2021 2:41AM ET
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I mean. shouldn't the snakes do less buybacks and maybe pay their fair share of taxes or help their workers
Sloppy Joe
Sloppy Joe Apr 30, 2021 2:07AM ET
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hm no more vaccine optimism or stimulus hopes...?
Jon Bal
Jon Bal Apr 30, 2021 2:07AM ET
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the other hand filled up first
Wayne Rollins
Wayne Rollins Apr 30, 2021 12:27AM ET
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maybe it's cheesy headlines tricking people into holding until big boys sell
Joel Schwartz
Joel Schwartz Apr 30, 2021 12:27AM ET
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Maybe, but big boys have more collective capital than literally all retail. A lot of big boys are still in the game, I think...and way overleveraged.
Mad Money
Mad Money Apr 29, 2021 11:25PM ET
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Stonks always go up
John Healy
John Healy Apr 29, 2021 10:53PM ET
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It might be less optimism and more money printing keeping world shares near record highs.
trevor hron
trevor hron Apr 29, 2021 10:53PM ET
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Most definetly. When the music stops its goimg to be a day of reckoning. Since currency printing is mostly staying under the radar because every central bank is printing as fast as the machines will go. Therefore keeping currency prices at a close comparison to what currency exchange rates before the pandemic. Thats going to be tricky.
 
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