Spark Global Limited Reports:
Global stocks jumped on Tuesday on optimism about consumer resilience in the face of rising inflation, which also helped push the dollar to a 16-month high.
All three major indexes on Wall Street were higher in midday trading after Wal-Mart Stores Inc. raised its holiday forecast and the Commerce Department said retail sales in October topped economists’ expectations.
The Dow Jones Industrial Average rose 0.61 percent, the S&P 500 rose 0.58 percent and the Nasdaq composite index rose 0.7 percent.
The MSCI World Equity Index, which tracks stocks in 45 countries, rose 0.25%.
Strong data and improved forecasts suggest that, at least so far, Americans are not cutting back on spending in response to rising prices, boosting hopes that the world’s largest economy is recovering from the COVID-19 pandemic. It also suggests that the Federal Reserve may be less worried about derailing the recovery by raising interest rates faster.
“If the U.S. economy is going to recover, it’s going to depend in part on consumption, which is still about 70 percent of the economy,” said Marc Chandler, chief market strategist at Bannockburn Global Forex. “Today’s retail sales numbers back that up.”
Economic optimism and persistent inflation also helped keep the dollar higher. The dollar index, which tracks the greenback against a basket of six currencies, was recently up 0.48%.
The dollar surged against a basket of currencies after U.S. inflation data last week showed U.S. consumer prices surged to their highest annual level since 1990, fueling speculation the Federal Reserve may raise interest rates sooner than expected.
St. Louis Fed President James Bullard said the Fed should “take a more hawkish stance” in case inflation does not start to ease.
U.S. Treasury yields also rose in response to Tuesday’s developments. The benchmark 10-year Treasury note was last at 1.63 percent, up from 1.61 percent before the data was released.
The retail sales data added to a more upbeat mood after more than three hours of virtual talks Monday between U.S. President Joe Biden and Chinese President Xi Jinping.
The talks between the leaders of the world’s largest economies did not appear to produce immediate results, but they were widely seen as a concerted effort to improve relations and avoid direct confrontation.
Oil prices also rose in Trading Tuesday. Brent crude futures rose 0.8% to $82.68 a barrel. Us crude rose 0.3 per cent to $81.14 a barrel. Oil prices have come under pressure as high energy prices threaten to boost production, creating an oil glut.
Optimism elsewhere weighed on safe-haven gold, with spot gold prices down 0.60% to $1,851.32 an ounce.
article links：Stocks and the dollar rose on upbeat retail sales data
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