Global stocks, dollar gain on soft landing hopes

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Global stock markets rallied and the dollar strengthened after a slew of data showed a strong U.S. economy that is decelerating with slowing inflation, giving credence to the Federal Reserve’s desire to engineer a soft landing. | Reuters

MSCI’s all-country world index, a gauge of stocks in 47 countries, rose 0.90 percent to hit a fresh five-month high, while the dollar index rose 0.246 percent.

Futures are pricing a 94.7 percent probability of a 25 basis points hike next Wednesday and see the Fed’s overnight rate at 4.45 percent by next December, or lower than the 5.1 percent rate Fed officials have projected into next year on market expectations of a rate cut. “On balance, the data being better than expected suggests there’s more resilience in the economy than many have given it credit,” said Joe Manimbo, senior market analyst at Convera in Washington. “The fact that inflation figures in the Q4 data moderated suggests it’s a Goldilocks scenario.”The Dow Jones Industrial Average rose 0.61 percent, the S&P 500 gained 1.1 percent and the Nasdaq Composite added 1.76 percent. In Europe, the broad STOXX 600 index closed up 0.42 percent.

 

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