Global stocks extended gains on Monday after posting their best performance in a month last week. Mining stocks led an advance in Europe’s Stoxx 600, while Chinese technology shares helped an Asian equity index jump more than 1.5%. US futures rose, with tech stocks set to extend gains following their best week since March. Quarterly portfolio rebalancing by institutional buyers could be helping equities as investors assess whether inflation is cresting and recession can be averted.
In time, that could give policy makers latitude to ease up on sharp interest-rate hikes. A more troubling scenario is of lasting price pressures and tighter policy even as the global economy falters. “There’s a feeling that things aren’t as bad as we thought they were going to be,” Carol Pepper, founder of Pepper International, said on Bloomberg Radio. She added “there’s a hope that perhaps we’ve oversold, perhaps there’s not going to be a recession.