After Several Days of Decline, Growth Recorded in All Global Markets

On Wall Street, stock indices rose on Tuesday after several days of decline, thanks to better-than-expected economic indicators and portfolio beautification ahead of the quarter’s end.

The Dow Jones strengthened by 0.63 percent to 33,926 points, while the S&P 500 rose by 1.15 percent to 4,378 points, and the Nasdaq index increased by 1.65 percent to 13,555 points.

After several days of decline, these indices rose yesterday, thanks to better-than-expected data on home sales, an increase in industrial orders, and consumer confidence in the U.S.

This, in fact, alleviated fears of a recession.

– These data gave investors reasons to buy back stocks that had been under significant pressure in previous days – says Mark Luschini, a strategist at Janney Montgomery Scott.

However, the market’s growth is also attributed to portfolio beautification, as portfolio managers typically buy stocks that performed best in the previous quarter at the end of the quarter.

Thus, yesterday, stock prices in the technology sector rose the most, for example, Apple, Amazon.com, Microsoft, Meta Platforms, Tesla, Nvidia…

– Last week was very bad for the market, and stock prices fell on Monday as well. This is only a partial recovery. It is likely a portfolio beautification since we are at the end of the quarter – says Rhys Williams, a strategist at Spouting Rock Asset Management.

Since the beginning of the year, the S&P 500 index has risen by more than 14 percent, primarily due to investors’ hopes that the U.S. central bank will soon end the cycle of interest rate hikes and even start lowering rates by the end of the year.

However, the question arises whether this growth is justified, given that the growth of the U.S. economy is slowing, which will pressure corporate earnings, while the Fed signals further interest rate increases in the coming months as inflation remains significantly above the central bank’s target levels.

After several days of decline, stock prices also rose on European exchanges yesterday. The London FTSE index strengthened by 0.11 percent to 7,461 points, while the Frankfurt DAX rose by 0.21 percent to 15,846 points, and the Paris CAC increased by 0.43 percent to 7,215 points.

Mixed Sentiment on Asian Markets

On the exchanges in Japan and Australia, stock prices rose on Wednesday, just like on Wall Street the day before, while other markets traded cautiously as there were no news to stimulate investors.

The MSCI index for the Asia-Pacific region was almost unchanged around 7:00 AM compared to yesterday.

Meanwhile, the Japanese Nikkei index jumped by 1.6 percent, and stock prices in Australia also rose significantly by about 1 percent. In Shanghai, Hong Kong, and South Korea, however, they fell between 0.2 and 0.6 percent.

Yesterday, stock prices on Chinese exchanges rose significantly after the Chinese government announced that GDP growth in the second quarter would be higher than in the first and that growth this year could be around the targeted level of 5 percent.

However, this morning, investors were shaken by the data that the total profit of Chinese industrial companies fell by almost 19 percent in the first five months of this year compared to the same period last year.

This is, admittedly, a smaller decline compared to previous months, but it still does not indicate that the growth of the Chinese economy is significantly accelerating.

Additionally, media reports suggest that U.S. authorities may impose new restrictions on the export of artificial intelligence chips to Chinese companies.

In Japan and Australia, stock prices, however, rose significantly, following yesterday’s growth on Wall Street, when the Dow Jones strengthened by 0.6 percent, while the S&P 500 rose by 1.15, and the Nasdaq index by 1.65 percent.

The rise in indices, after several days of decline, is attributed to better-than-expected data on home sales, an increase in industrial orders, and consumer confidence in the U.S.

European Markets Follow Wall Street’s Growth

On European exchanges on Wednesday morning, stock prices rose, just like on Wall Street the day before, and investors will focus on comments from central bank leaders.

The STOXX 600 index of leading European stocks was up 0.5 percent at 9:30 AM, strengthening for the second consecutive day.

This morning, the London FTSE index rose by 0.34 percent to 7,486 points, while the Frankfurt DAX increased by 0.55 percent to 15,995 points, and the Paris CAC rose by 0.59 percent to 7,258 points.

Investors will focus today on a panel discussion with central bankers in the Portuguese city of Sintra, which will include U.S. Fed Chairman Jerome Powell and European Central Bank President Christine Lagarde.

The latest messages from these banks indicate further interest rate increases to curb inflation, which remains significantly above target levels.