NEW YORK (Reuters) - A world stock index was up slightly on Monday and the dollar rose to a more-than seven-week peak against the yen as investors awaited clues from the U.S. Federal Reserve on the timing of further rate hikes and tensions over North Korea eased.
The S&P 500 was nearly flat, cutting early gains following a decline in tech shares. MSCI’s index of world stocks < .MIWD00000PUS> was up 0.1 percent after earlier touching an intraday record high.
A relatively quiet North Korea and U.S. Secretary of State Rex Tillerson’s comments on a “peaceful solution” over the weekend eased some concerns for investors.
But an address by U.S. President Donald Trump to world leaders at the United Nations on Tuesday and elections in Germany and New Zealand will add extra political uncertainty to the mix this week.
The main event, however, will be the Fed’s meeting on Tuesday and Wednesday, at which it is likely to take another step toward policy normalization in what is rapidly becoming a worldwide trend. [nL2N1LU21N]
The central bank is expected to announce plans to begin unwinding its $4.2 trillion portfolio of Treasuries and mortgage-backed securities, nearly a decade after the global financial crisis.
This prospect may be prompting the sell-off in sectors such as utilities, while it is boosting banks, said Stephen Massocca, senior vice president at Wedbush Securities in San Francisco.
“There’s momentum in the market. There’s lots of cash. Even though the Fed’s about to reduce their balance sheet you continue to have incredibly aggressive monetary policy. That continues to lead to money flowing into the market almost in an indiscriminate fashion,” he said.
Investors are far from persuaded the Fed will move on rates again this year, with a December change put at less than a 50 percent probability in the futures market <0#FF:>.
Benchmark 10-year Treasury notes US10YT=RR were last down 7/32 in price to yield 2.226 percent. The yield fell to 2.016 percent on Sept. 8, the lowest since Nov. 10, 2016.
World stocks reach new peak as Fed-focused week begins
September 18, 2017 by Leave a Comment