Market Overview

Supporting factors of improved performances on Wall Street- What are they?

supporting factors of improved performances on Wall Street

Bank of America, a leading US financial institution, has stated that global investors have invested ~$40 billion in stocks since Oct. 9. This was the biggest 2-week inflow since the month of February in 2022. As a result this increased investments in the overall market, equities on Wall Street saw a significant rally. In just 4 trading sessions ended Tuesday, the investors earmarked ~$16.5 billion in stock funds, as per the noted from the BofA. While analysing the supporting factors of improved performances on Wall Street, global stocks have rallied since October end because data suggested that the U.S. inflation continues to cool down faster than the expectations. 

Because of these data points, investors’ hopes have increased that global central banks should start their rate-cutting campaign by middle of 2024. These have been considered as some of the supporting factors of improved performances on Wall Street. 

The U.S. S&P 500 stock index saw an increase of ~8.6% so far in the month of November alone. As a result of this resilient performance, this stock index is on track for biggest monthly gain since the month of July in 2022. MSCI’s index of global stocks saw an increase of ~8.5% so far. Experts believe that it is on track for biggest monthly increase in 3 years.

Cash funds have been attracting investors, as they have poured in ~$40 billion of inflows throughout the week. Right now, they have strong yields as a result of increased central bank interest rates. 

Global investors earmarked ~$4 billion in bond funds, which have investment grade corporate bonds getting ~$3.1 billion in biggest inflow in around 15 weeks. However, there were modest outflows from the Treasury funds.

Coming to the commodities, gold prices increased to more than 6-month high on Monday because of weaker dollar and expectations of an end to the US interest rate hikes. Collectively, these factors lifted demand for yellow metal amidst favourable technical signals. The dollar saw the fall of ~0.1% against basket of several other major currencies, with the greenback hovering around over two-month low which it touched last week. This made the gold less expensive for holders of several other currencies.

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