Global Stocks End Higher

Global Stocks End Higher

Global stocks closed higher on Wednesday, as strong earnings from U.S. technology companies and OPEC+ plans for moderate oil output helped offset concerns about weak economic data.

Investors have also dismissed the rate at which central banks raise interest rates.

The STOXX 600 index of 600 European companies rose 0.45 percent for the third straight session, recouping nearly half of its losses during January’s global stock market rout.

The MSCI World Index of stocks gained 0.80 percent.

Crude oil is approaching seven-year highs, while the dollar is weakening. The Dow Jones Industrial Average gained 0.63 percent, and the S&P 500 gained 0.94 percent on Wall Street. The Nasdaq Composite increased by 0.5 percent. The tech-heavy index fell as much as 19% from its all-time high in November as investors dumped highly valued growth stocks on the prospect of faster than expected rate hikes.

The temptation to participate in the sell-off of high-growth stocks should avoid.

In January, the eurozone’s inflation rate of 5.1 percent defied expectations of a drop to 4.4 percent. It sent German government bond yields to multi-year highs and sending the euro soaring.

The European Central Bank has insisted that price increases are only temporary and harmless. The ECB has taken a slap in the face due to the unexpectedly high inflation rate. It will have to acknowledge the increased inflation risks and take its foot off the monetary policy pedal.

Several Asian markets, including China, were closed for the Lunar New Year holidays.

Investor sentiment has shifted between concerns about the Federal Reserve and other central banks tightening and optimism about the economic recovery. The earnings outlook released on Wednesday helps alleviate some of the uncertainty. However, stubborn inflation and geopolitical risks remain a concern.

Oil Price

Oil prices rose on Wednesday. It is approaching a seven-year high after OPEC+ maintained its planned output increase despite pressure from top consumers to increase output more quickly.

According to a Reuters source, OPEC+ agreed to increase oil production by 400,000 BPD beginning in March after a brief meeting.

Crude oil in the United States recently fell 0.22 percent to $88.01 per barrel, while Brent was at $89.34, up 0.2 percent on the day.

Risky currencies such as the Australian dollar, euro, and the British pound rose. The dollar index fell 0.29 percent, while the euro increased 0.31 percent to $1.1304.

An unexpected drop in private payrolls aided in the stabilization of U.S. Treasury yields as investors assessed its potential impact on Friday’s broader jobs report.