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Global equities, U.S. yields rise despite weak U.S. economic growth data

EconomyOct 28, 2021 05:28PM ET
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2/2 © Reuters. FILE PHOTO: A man looks at a stock quotation board outside a brokerage in Tokyo, Japan, April 18, 2016. REUTERS/Toru Hanai 2/2

By Chibuike Oguh

NEW YORK (Reuters) -Global equities moved toward record highs on Thursday and U.S. Treasury yields rose as investors discounted weak U.S. economic growth data to retain their focus on strong corporate results and interest rate expectations amid rising inflation.

U.S. gross domestic product increased at a 2% annualized rate last quarter, the slowest since the second quarter of 2020 when the economy was beset by COVID-19 pandemic restrictions, the Commerce Department said in its advance GDP estimate on Thursday.

The weak GDP figure was offset by continued improvement in U.S. jobless claims, which dropped 10,000 to a seasonally adjusted 281,000 last week, remaining below the 300,000 threshold for the third straight week.

"The GDP numbers are not a surprise since we've come off a bottom and it's going to slow to the normal pre-COVID pace," said Dan Genter, chief investment officer at RNC Genter Capital Management in Los Angeles.

All three major U.S. stock indexes ended the day's session higher, with the S&P 500 and Nasdaq boasting record closing levels thanks partly to gains by Apple Inc (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) Inc. Both companies posted results after the close that missed expectations, however.

The MSCI All World Stock Index rose 0.71% to 746.98 points, barely below its lifetime high of 749.16 points hit last month.

In Europe, the STOXX index of 600 companies pared back earlier losses and rose 0.24% to 475.16 after the European Central Bank left its monetary policy unchanged, as widely expected.

The yield on the U.S. 20-year bond on Thursday rose slightly above the 30-year bond yield for the first time, according to traders, a move that garners attention because of investor sensitivity to inverted yield curves that can be a harbinger of recession.

Another key yield curve showing the spread between 2-year and 10-year yields was also flatter on the day.

The benchmark U.S. 10-year yield was trading up at 1.577%.

"With what we're seeing with PCE run rate, there's a feeling at some point in time the Feds are going to raise rates," Genter added.

On Wall Street, the Dow Jones Industrial Average rose 0.68% to 35,730.48, the S&P 500 gained 0.98% to 4,596.42 and the Nasdaq Composite added 1.39% to 15,448.12.

The U.S. dollar held losses to the euro and British pound late, as currency traders digested moves in interest rate markets, comments by the ECB President Christine Lagarde and a weaker-than-expected U.S. economic report.

The dollar index of major currencies lost nearly 0.6% to 93.349, with the euro up 0.67% to $1.1682.

Gold prices rose as demand for the safe-haven asset was lifted by a softer dollar and data showing the U.S. economy grew at its slowest pace in more than a year.

Spot gold rose 0.11% to $1,798.64 per ounce. U.S. gold futures settled up 0.2% at $1,802.6.

Global equities, U.S. yields rise despite weak U.S. economic growth data
 

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Comments (9)
Sk Sabbir
Sk Sabbir Oct 29, 2021 6:56AM ET
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Rodney Dangerfield
Rodney Dangerfield Oct 28, 2021 8:11PM ET
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89% of stocks are owned by those in the top 10% of wealth in the United States
Tom Sc
Tom Sc Oct 28, 2021 5:08PM ET
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understated inflation means overstated growth....if GDP is running at 2% and u believe that inflation is running 2% higher than reported, which is very easy to believe, we are in negative growth territory right now.
Jokers R Us
Jokers R Us Oct 28, 2021 5:08PM ET
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they don't care
Hassan Raza
Hassan Raza Oct 28, 2021 12:30PM ET
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US indices depicts other way of your HEADLINE
Casador Del Oso
Casador Del Oso Oct 28, 2021 10:14AM ET
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recession always follows sharp rise in energy prices. look out below, joe.
Raja Tampan
Raja Tampan Oct 28, 2021 3:10AM ET
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So nice. It's worry time...
Myint Kyaw
Myint Kyaw Oct 28, 2021 2:01AM ET
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2d what are you
Kaveh Sun
Kaveh Sun Oct 28, 2021 1:54AM ET
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Yawn, there is a shortage in everything due to shutdowns. The media keeps yaking #
Miriam Morkhul
Miriam Morkhul Oct 28, 2021 1:54AM ET
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Money printing causes bidding wars for resources and products, that also contributes to shortage.
Jokers R Us
Jokers R Us Oct 28, 2021 1:54AM ET
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Miriam Morkhul Federal reserve notes aren't money
Muneer Khan
Muneer Khan Oct 28, 2021 12:20AM ET
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muneer Khan
Cali Cartel
Cali Cartel Oct 28, 2021 12:20AM ET
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St fu u dun fuq
 
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