Summary: World shares are on the rise as investors regain confidence, unwinding last week’s concerns about the Middle East conflict. The global recovery is also dependent on China’s economic growth figures and the upcoming corporate earnings reports. Despite ongoing geopolitical tensions, financial markets are proving resilient.
Global stock markets are gaining momentum as investors regain confidence and unwind concerns about the recent Middle East conflict. Last week’s worries about war in the region have subsided, allowing markets to bounce back. The recovery in stock prices is also influenced by the upcoming release of China’s economic growth figures. Economists predict a drop in annual growth to below 5% for July-September, causing concerns about the impact on regional and global trade.
Germany’s DAX and Paris’ CAC 40 both recorded slight gains, while Britain’s FTSE 100 rose by 0.3%. In Asia, Tokyo’s Nikkei 225 and Hong Kong’s Hang Seng saw solid gains of 1.2% and 0.7% respectively. The Shanghai Composite index also rose by 0.3%, while Australia’s S&P/ASX 200 climbed 0.5% and India’s Sensex advanced by 0.6%.
Despite ongoing tensions in the Middle East, financial markets are showing resilience. On Wall Street, the S&P 500 had its best day since the surprise attack on Israel by Hamas, climbing by 1.1%. The Dow and Nasdaq also recorded gains. Analysts attribute the market recovery to diplomacy efforts by U.S. Secretary of State Antony Blinken and others in the region, although concerns remain that sentiment could turn sour if Israel initiates a ground offensive in Gaza.
Oil prices, which were volatile last week due to concerns about disruptions in supply from Iran, have fallen back. U.S. benchmark crude oil currently stands at $86.68 per barrel, while Brent crude is priced at $89.80 per barrel. Gold experienced its best week in nearly seven months on worries of a possible Israeli invasion of northern Gaza, but has now settled at $1,932.70 per ounce.
The 10-year Treasury yield has risen to 4.75%, up from 4.71% on Monday and 4.62% late Friday, following a period of tumbling yields. Despite geopolitical shocks often causing initial weakness in financial markets, longer-term fundamentals tend to prevail. Chief of Investment Research at Nationwide, Mark Hackett, advises investors to remain resilient and focus on their long-term financial plans.
This week will see over 50 companies in the S&P 500 reporting their earnings, including Bank of America, Johnson & Johnson, and Tesla. The hope is for a strong reporting season for corporate profits. Despite higher interest rates implemented by the Federal Reserve to combat inflation, the U.S. economy has shown resilience. Analysts estimate a 0.4% increase in earnings per share at S&P 500 companies compared to the same quarter last year. Recent better-than-expected reports from banks and positive market reaction to Lululemon joining the S&P 500 index are further signs of market strength.
In currency trading, the U.S. dollar has strengthened against the Japanese yen, while the euro has declined against the dollar.
Tags: World Shares, Stock Market, Middle East, China, Economic Growth, Corporate Earnings, Geopolitical Tensions, Oil Prices, Gold, Treasury Yields