{"id":122566,"date":"2021-10-07T21:34:42","date_gmt":"2021-10-07T21:34:42","guid":{"rendered":"https:\/\/fin2me.com\/?p=122566"},"modified":"2021-10-07T21:34:42","modified_gmt":"2021-10-07T21:34:42","slug":"stocks-rally-as-stagflation-fears-energy-prices-ease","status":"publish","type":"post","link":"https:\/\/fin2me.com\/business\/stocks-rally-as-stagflation-fears-energy-prices-ease\/","title":{"rendered":"Stocks rally as stagflation fears, energy prices ease"},"content":{"rendered":"
NEW YORK\/LONDON (Reuters) – World equity markets rebounded on Thursday after U.S. Senate leaders moved to avert a U.S. debt default, while a global easing in energy prices tempered deepening fears of \u201cstagflation.\u201d<\/p> European bourses rallied off 2-1\/2-month lows and Wall Street jumped as steady crude oil and natural gas prices offered relief after a shock 4% drop in German industrial production highlighted supply chain disruptions.<\/p>\n German output of cars and auto parts slid 17.5% in August due to supply shortages of intermediate products, providing a telling sign of the constraints posed by the combination of rising inflation and moribund growth, or stagflation.<\/p>\n But the number of Americans filing new claims for jobless benefits fell the most in three months last week, suggesting the U.S. labor market recovery was regaining momentum after a recent slowdown as COVID-19 infections subside.<\/p>\n Stagflation fears are overdone, and investors are overly focused on weaker economic growth and higher inflation though the long-term market trend is higher, said Bill Sterling, global strategist at GW&K Investment Management.<\/p>\n \u201cThe journey ultimately is to a global expansion that continues intact, which recently has had this stagflation tinge to it,\u201d he said.<\/p>\n The U.S. Senate took a step toward passing a $480 billion increase in Treasury Department borrowing authority, a move that would avert a catastrophic debt default later this month but set up another partisan showdown in early December.<\/p>\n MSCI\u2019s all-country world index closed up 1.15%, while the broad STOXX Europe 600 index rose 1.6%.<\/p>\n On Wall Street, the Dow Jones Industrial Average gained 0.98%, the S&P 500 rose 0.83% and the Nasdaq Composite moved up 1.05%.<\/p>\n Some of the negative pressures have been mitigated as investors reduced positions on concerns about a \u201cwhat if\u201d scenario concerning the debt ceiling, said Michael James, managing director of equity trading at Wedbush Securities.<\/p>\n \u201cThere\u2019s still a number of black clouds hanging over the market, but the skies have cleared up a little bit in the last two days,\u201d James said.<\/p>\n Euro zone bond yields fell as energy prices declined, recovering from a sharp sell-off in debt markets a day earlier that had been driven by inflationary concerns.<\/p>\n Yields on the benchmark German 10-year bund slid 0.3 basis point to -0.187%.<\/p>\n U.S. Treasury yields rose as traders awaited U.S. employment data for September on Friday. Volatility at the shortest end of the curve eased in the wake of a potential plan to avoid a default on government debt this month.<\/p>\n Investors anticipate employment figures that are near consensus will lead the Federal Reserve at its November meeting to indicate when it will begin tapering its massive stimulus program.<\/p>\n The benchmark 10-year U.S. Treasury yield rose 4.7 basis points at 1.5712%.<\/p>\n Oil prices shook off initial losses to turn positive on indications the United States may not release emergency crude reserves or ban exports, putting focus back on tight supply.<\/p>\n Brent crude rose 1.1% to settle at $81.95 a barrel. U.S. crude settled up 1.1% at $78.30 a barrel.<\/p>\n Natural gas prices are still up more than fivefold since the start of the year, and the huge increase over recent weeks has attracted attention from policymakers across the world.<\/p>\n U.S. gold futures settled down 0.2% at $1,759.20 an ounce.<\/p>\n Overnight in Asia, MSCI\u2019s broadest index of Asia-Pacific shares outside Japan closed up 1.8%, its biggest one-day rise since August.<\/p>\n Hong Kong led Asia\u2019s gains with a 3% bounce off a year low. South Korea\u2019s Kospi gained 1.8% and Japan\u2019s Nikkei firmed 0.5% to snap eight days of losses.<\/p>\n U.S.-listed Chinese stocks jumped, mirroring a rally in Hong Kong shares and as concerns about U.S.-Sino trade relations and Evergrande\u2019s debt crisis appeared to ease.<\/p>\n IShares China Large-Cap ETF and iShares MSCI China ETF both gained about 4.1%, while e-commerce giant Alibaba rose 8.3%, its biggest one-day gain since April.<\/p>\n China\u2019s most indebted property companies<\/p>\n The dollar eased from 12-month highs hit last month against a basket of currencies and held at a 14-month high against the euro.<\/p>\n The dollar index, which tracks the greenback versus a basket of six currencies, fell 0.02% to 94.204.<\/p>\n The euro was down 0.03% at $1.1552, while the yen traded up 0.17% at $111.6000.<\/p>\n