Jamie McGeever
9 min read
In This Article:
By Jamie McGeever
ORLANDO, Florida (Reuters) - TRADING DAY
Making sense of the forces driving global markets
By Jamie McGeever, Markets Columnist
Softer bond yields cushion stocks
Cooler inflation pressures in the shape of surprisingly soft U.S. economic data and a slide in oil prices helped bring down Treasury yields and support stocks on Thursday, although the recent surge on Wall Street does appear to be losing steam.
In my column today I look at how the decline in U.S. inflation - a healthy development, in most people's eyes - is coming with an unwelcome side effect - rising real yields. More on that below, but first, a roundup of the main market moves.
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If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today.
1. Trump promises to strengthen ties with United ArabEmirates on Gulf tour 2. Fed policymakers on hold to seek clarity from the data,but the data are not cooperating 3. APEC warns of stalling trade due to tariffs as China, USofficials meet 4. UK economy has a growth spurt before tax and tariffchallenges 5. Republicans embrace Trump's populist tax push withmidterms in mind
Today's Key Market Moves
* The Dow is the best performer of Wall Street's three mainindices, rising 0.65%. It's now right around the 200-day movingaverage of 42289 points. * The VIX volatility index closes at 17.81, its lowestclosing level since March 25. * Walmart shares fall as much as 5% after the retailerwarns on the outlook, but end the day only 0.5% lower. * Oil falls 2.5% on expectations for a U.S.-Iran nucleardeal, which could ease sanctions and free up more supply. * The yen is the big gainer in G10 FX, rising around 0.8%against the dollar ahead of Japan's Q1 GDP data on Friday. * South Korea's won rallies after a government official saysthe deputy finance minister met with a senior U.S. Treasuryofficial on May 5 to discuss the dollar/won market. * Gold hits a one-month low of $3,120/oz before reboundingto close at the day's high, up nearly 2% at $3,235/oz.
Inflation - calm before the storm?
A decline in European and U.S. bond yields provided the springboard for equity markets on Thursday. Or at least a cushion.
