Stocks shrug off rates risk as U.S. consumers spend
Bonds fell and the dollar rose on Thursday as roaring U.S. retail sales had investors reckoning on interest rates staying higher for longer to temper demand, though stock markets were focused on the bright side for earnings and climbed a little.
The S&P 500 (.SPX) rose 0.3% overnight. MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rose 0.6% in early trade. Japan’s Nikkei (.N225) rose 0.6%.
The greenback stood near six-week highs against the yen, yuan and kiwi. Benchmark 10-year Treasury yields , which rise when bond prices fall, hit their highest since early January.
U.S. retail sales increased by the most in nearly two years in January – up 3%, against expectations of a 1.8% rise – as Americans bought cars, clothes and furniture despite higher borrowing costs.
The figures came on the heels of stronger-than-expected labour data and with sticker-than-expected inflation.
Equities – with the Nasdaq (.IXIC) up 15% so far this year – are clinging to the positives, while in interest rate markets investors are quickly ditching hopes for cuts later in 2023.
This report’s information was first seen on REUTERS; to read more, click this link.