World shares oil gains amid new peak on stimulus hopes

Monitoring Desk

NEW YORK (Reuters) – A gauge of global equity markets scaled a new record on Friday on investor expectations of further stimulus from Washington and economic revival hopes that also lifted crude oil prices to nearly $60 a barrel.

MSCI’s all-country world index, which captures equity performance in 50 countries but is heavily weighed to U.S. stocks, especially big tech, rose 0.62% to cap its best week in three months, a gain of 4.35%.

Longer-term Treasury yields rose after a Labor Department report showed U.S. jobs rebounded less than forecast in January, which underscored the need to pass a $1.9 trillion COVID-19 relief package, President Joe Biden said. Democrat lawmakers approved a budget outline that will allow them to muscle Biden’s plan through in the coming weeks without Republican support.

Job losses in December and November were revised higher than previously reported.

Gold rose as the dollar retreated slightly, as investors will continue to bank on the greenback with Treasury yields rising.

The market was looking through the short-term disappointment in the employment report, said Tom Hayes, chairman and managing member at hedge fund Great Hill Capital LLC in New York.

“It’s very hard to get too pessimistic about downward revisions when you have three tailwinds at your back, namely the stimulus, the vaccinations and (declining coronavirus) cases, and earnings,” Hayes said.

Job losses are still concentrated in retail, leisure and hospitality, and healthcare, particularly in healthcare and nursing homes, “so this is all COVID-related issues,” he said.

As more people get vaccinated, jobs will come back, which is driving investor sentiment, Hayes said.

Courtesy: Reuters