World Economy

Global Stocks Steady After 3-Week Rally

Global Stocks Steady After 3-Week RallyGlobal Stocks Steady After 3-Week Rally

Global equity markets retreated Monday as investors took stock following a three-week rally.

Futures pointed to a 0.4% opening loss for the S&P 500. Changes in futures don’t necessarily reflect market moves after the opening bell, Nasdaq reported.

The Stoxx Europe 600 declined 0.8% in the afternoon trade as shares in banking companies declined, with BNP Paribas SA, Deutsche Bank AG and HSBC PLC all down more than 2%.

Markets are now in a bit of a wait-and-see approach until Thursday’s European Central Bank meeting, said Nandini Ramakrishnan, global market strategist at J.P. Morgan Asset Management.

Officials are widely expected to cut a key interest rate further into negative territory and expand the bank’s stimulus measures to combat persistent weakness in the region’s growth and inflation.

“There are many different combinations of additional easing that (ECB President Mario) Draghi can put out,” Ramakrishnan said.

Earlier, Chinese shares rose slightly after authorities mapped out plans to buoy growth and said they expect the economy to grow between 6.5% and 7% this year, which is the lowest growth target Beijing has set in a quarter of a century.

Meanwhile in commodities, the benchmark price for iron ore, a key steelmaking ingredient, rallied to a nine-month high after Chinese leaders said they would prioritize economic growth over restructuring this year, signaling the potential for more stimulus.

Shares in Australia closed at their highest level in more than two months as mining companies gained.

Japan’s Nikkei Stock Average closed down 0.6%, while shares in Hong Kong were flat.

In other commodities, Brent crude oil added 1.2% at $39.19 a barrel, on track to close at its highest level this year. A recent rebound in commodities prices and better US economic data has helped stoke the recent rally in global stocks.

Friday’s US jobs report further eroded fears of a US recession, sending Wall Street to a slightly higher finish.

“What you don’t have is a catalyst for growth, but you also don’t have a catalyst for a recession,” said Phil Blancato, chief executive at Ladenburg Thalmann Asset Management.

With the fear of recession receding, investors have bought back into some of the assets they sold off earlier this year, while junk-bond yield spreads have narrowed and volatility has receded.

In currencies, the dollar was down 0.1% against the yen at 113.59 after Bank of Japan Gov. Haruhiko Kuroda on Monday played down the likelihood of additional stimulus at a policy meeting next week, while the euro was down 0.4% against the dollar at 1.09 after data showed a decline in German manufacturing orders.