World shares steady as Biden exits White House race
Item 1 of 3 Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., July 3, 2024. REUTERS/Brendan McDermid/File Photo
[1/3]Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., July 3, 2024. REUTERS/Brendan McDermid/File Photo Purchase Licensing Rights, opens new tab
Stocks rise, bitcoin rally slows as Biden bows out
Wall Street stocks advance
China trims key short-term rate
Oil prices fall, US dollar gains
Earnings season to test lofty tech valuations
LONDON/NEW YORK, July 22 (Reuters) – An index of global shares steadied on Monday as investors weighed President Joe Biden’s decision to end his re-election bid at the weekend, while a surprise rate cut by China’s central bank failed to boost Asian markets.
Biden announced on Sunday he would drop out of the U.S. presidential election race and endorsed Vice President Kamala Harris for the Democratic ticket to challenge former President Donald Trump, who is the Republican nominee.
Markets took the news in their stride, with MSCI’s gauge of stocks across the globe (.MIWD00000PUS), opens new tab up 0.39% to 814.07. The index fell 2.1% last week in its worst weekly performance since April.
“I think largely the Biden bailing out was priced in; we just needed definitiveness on that,” said Lou Basenese, president and chief market strategist at MDB Capital in New York. “Now you’re seeing the Trump trades, more risk taking, and small caps, going long oil and gas, and Bitcoin really returning to the market,” he added.
The dollar was slightly higher against a basket of currencies, capturing some safe-haven flows, while Bitcoin – which has tended to be a beneficiary of the growing chances of a return of Trump to the White House – steadied after having fallen on Sunday following Biden’s announcement.
The dollar index gained 0.13% at 104.36, with the euro up 0.03% at $1.088. Bitcoin , which hit six-week highs last week in its strongest weekly rally since February, traded on a more even keel on Monday, down 0.25% at $66,811.97.
On Wall Street, the benchmark S&P 500 index (.SPX), opens new tab was trading higher led by gains in technology stocks. Nvidia (NVDA.O), opens new tab was up nearly 3%, buoyed by news it is working on a new AI chip for the Chinese market.
Investors will be eyeing a packed week of corporate earnings. Tesla (TSLA.O), opens new tab and Google-parent Alphabet (GOOGL.O), opens new tab kick off the season for the “Magnificent Seven” megacap group of stocks.
U.S. Treasuries were little changed as markets assessed the uncertainly surrounding the race for the White House, with yields on benchmark U.S. 10-year notes adding 0.4 basis points to 4.243%. Markets are fully pricing in the prospect of a rate cut by the Federal Reserve in September, which has helped underpin risk appetite. .
“The withdrawal of President Biden from the race, I don’t think is going to have any impact on the market because whether it’s Kamala Harris or somebody else, the policies are going to be the same,” said David Spika, chief markets strategist at Turtle Creek Wealth Advisors in Dallas.
“The market’s growing today because big tech is back. We saw a couple of weeks in a row where there was a rotation out of the big tech names into small caps and values and cyclicals, which actually was very healthy.” he added.
Europe’s biggest banks also report this week, with eyes on whether the gains from higher interest rates have run out of steam and if recent political drama is weighing on sentiment. The STOXX 600 (.STOXX), opens new tab finished up 0.93%.
The People’s Bank of China cut short-term rates by 10 basis points, which pulled down long-term borrowing costs and bond yields. The move follows Beijing’s release of a policy document on Sunday outlining its ambitions for the economy. MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS), opens new tab lost 0.64%.
Oil prices fell for a second consecutive session amid rising stockpiles and signs of weak demand. Brent crude futures fell 0.54% to $82.18 per barrel. The U.S. West Texas Intermediate crude futures contract for August delivery, which expires on Monday, was down 0.4% to $79.79 a barrel.
Gold prices fell to more than a one-week low. Spot gold lost 0.54% to $2,387.04 an ounce. U.S. gold futures gained 0.28% to $2,402.10 an ounce.
Chibuike reports on Breaking News, with a focus on finance and markets. He previously covered U.S. private equity firms, and holds master’s degrees in journalism from New York University and Edinburgh Napier University.
