Written By The US equity futures market is on a high as European shares have returned to growth. After a week of uncertainty and volatility, US investors are breathing a sigh of relief as the world’s major economies show signs of recovery. What’s causing the surge in US stocks? How will the rise in equity futures affect other markets? And what implications does this have for investors around the world? In this blog post, we explore these questions and more to provide an overview of what’s happening in the global equity markets.
European stocks return to growth
European stocks soared on Thursday as investors returned to riskier assets following the U.S. Federal Reserve’s decision to leave interest rates unchanged.
The pan-European STOXX 600 index was up 1.6 percent, rebounding from a selloff in the previous session when it fell to its lowest level in more than two weeks.
All major bourses and sectors were in positive territory, with banks leading the charge higher.
In corporate news, shares of BNP Paribas rose nearly 4 percent after the French lender posted better-than-expected quarterly results.
US equity futures soar
US equity futures surged on Tuesday as European stocks returned to growth. The gains came after a sharp sell-off in global markets on Monday.
In the US, Dow Jones Industrial Average futures were up 1.1%, while S&P 500 and Nasdaq 100 futures rose 1.3% and 1.6%, respectively.
European stocks rallied on Tuesday, with the pan-European STOXX 600 index gaining 1.2%. The UK’s FTSE 100 Index climbed 0.7%.
Asian shares had closed mostly lower on Tuesday, with Japan’s Nikkei 225 index falling 0.4%.
Asian shares mixed
Asian shares were mixed on Friday as investors digested a batch of corporate earnings and looked ahead to the release of U.S. inflation data.
In Japan, the Nikkei 225 Index was up 0.3% while South Korea’s Kospi Index fell 0.4%. Australia’s S&P/ASX 200 Index also dipped 0.2%.
China’s mainland markets were closed for a public holiday. Hong Kong’s Hang Seng Index rose 0.8%, led by gains in energy and financial stocks.
Overall, Asian shares were tracking the positive mood from Wall Street overnight where U.S. equity futures soared after European shares returned to growth following a three-day losing streak.
Gold prices dip
Gold prices dipped on Monday as the U.S. dollar strengthened and equity markets rallied on news that European countries were returning to growth.
The price of gold fell 0.4 percent to $1,235.30 an ounce in early trading, while the dollar index rose 0.2 percent against a basket of currencies. European stocks soared after data showed that the eurozone economy grew for the first time in 18 months during the second quarter.
Analysts said the rally in riskier assets was weighing on gold, which is seen as a safe-haven asset during times of market turmoil. “With risk appetite back on track…gold is likely to lose its shine,” Commerzbank analyst Carsten Fritsch said in a note.
Oil prices rise
As the European Union begins to slowly emerge from its recession, equity markets are seeing a resurgence in growth. US equity futures are soaring as investors bet on continued positive momentum in the global economy.
Oil prices have risen along with stocks, as the market anticipates increased demand from a growing economy. The price of crude oil is up nearly 4% since the start of the year, and shows no signs of slowing down. This rise in oil prices is good news for energy companies and their shareholders, but bad news for consumers who will see higher prices at the pump.
US economic data continues to improve
The US economy continues to show signs of improvement, with the latest data indicating that growth is picking up pace. This has led to a surge in US equity futures, as investors bet on a rebound in the American economy.
The latest data shows that retail sales rose 0.6% in May, while industrial production increased by 0.5%. These figures follow strong gains in April, suggesting that the US economy is on track for a strong second quarter.
In addition, jobless claims fell to their lowest level since April 2000 last week, indicating that the labor market remains healthy. With economic conditions improving, it is likely that the Federal Reserve will raise interest rates later this year.
All in all, the latest data indicates that the US economy is continuing to recover from the pandemic-induced recession. This bodes well for equity markets and suggests that the recent rally has further to run.
Conclusion
US equity futures have soared in the wake of European markets returning to growth. The positive sentiment is a welcome sign of recovery for global markets as investors become more optimistic about the future. While there are still much uncertainty surrounding the world economy, it appears that confidence is slowly but surely increasing. As countries around the world move closer to reopening their economies and restoring public life, we may soon witness a surge in US equity futures and other financial indices across the globe.
