Global stocks edge higher but oil prices fall as investors mull the economy and await earnings

  • Global stocks edged higher Monday but oil prices slipped as investors mulled the economy and earnings.
  • US futures slipped after the S&P 500 had its best month November on signs that the Fed may pause rate hikes.
  • Investors will be keeping a close eye on economic data and upcoming company earnings for hints on the economy.

Global stocks ticked higher Monday but US futures and oil prices fell as investors mulled the economy and awaited more company earnings reports.

The MSCI World stock index was up around 0.3%. But S&P 500 futures were down around the same amount, with Dow Jones and Nasdaq 100 futures also in the red.

In Asia, China’s CSI 300 index rose despite survey data showing that factory activity unexpectedly contracted in June. 

Brent crude oil fell roughly 1% to around $103 a barrel, with WTI crude, the US benchmark price falling further, as worries about Asian growth weighed on the market.

Global stocks have risen sharply in recent weeks as investors have latched on to tentative signs that inflation may be peaking. They have also bet that a sharp slowdown in growth will mean central banks will stop raising borrowing costs sooner than expected, resulting in lower peak or “terminal” interest rates.

The S&P 500 rallied 9.1% in July in its best monthly performance since November 2020.

However, many analysts have said stocks could be experiencing a so-called bear market rally which won’t last.

Investors will be keeping a close eye on survey data out of the US later on Monday which will give a sense of the strength of the private sector in June. 

On top of that, Caterpillar, Starbucks, PayPal, Uber and Berkshire Hathaway are among the big companies set to release earnings this week.

“It’s a complicated outlook at the moment as we don’t think the US is in a typical recession yet but will almost certainly be within a few quarters,” said Jim Reid, fixed income strategist at Deutsche Bank. 

“That delay is supportive for markets relative to what was priced a few weeks ago but it’s hard to say the outlook is positive. However the market has more rallied on lower expected terminal rates and the move to price rate cut probabilities within 6 months.”

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