Global Stocks, Pound Rally as Brexit Concern Softens; Oil Rises
Global stocks rallied for a second day and the dollar weakened amid speculation policy makers will move to prevent the U.K.’s European secession from hampering global growth. Crude oil gained as American stockpiles fell.
The MSCI All-Country World Index headed for its biggest two-day gain since August as central banks around the world signaled a readiness to act should Brexit roil global markets. The S&P 500 Index erased a loss for the year, with a Goldman Sachs Group Inc. index of the most-shorted shares surging the most since 2011. Emerging-market stocks and currencies climbed for a second day as the dollar fell on odds that indicated the Federal Reserve is more likely to cut rates than raise them. Oil climbed toward $49 a barrel. Bond yields in Spain, Portugal and Italy slipped.
With Britain in limbo as EU leaders gathered in Brussels to discuss the nation’s withdrawal from the bloc, traders have pushed back bets on U.S. rate increases, indicating higher borrowing costs are unlikely before 2018. A a majority of economists surveyed by Bloomberg predict that the Bank of England will add more stimulus to soften Brexit’s blow on the U.K. economy, while signs that the pain will spread quickly have yet to emerge.
“I don’t think it’s shocking that cooler heads are prevailing temporarily ,” said Daniel Kern, chief investment officer of Boston-based TFC Financial Management, which oversees $850 million. “The markets are discounting that there’s very little chance of the Fed raising rates this year. We’re definitely in the speculation phase of this process, and it’s going to be a while before there’s any real economic data to react to. It’s somewhat fragile as things are so fluid as new information comes in.”
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http://www.bloomberg.com/news/articles/2016-06-28/oil-climbs-with-n-z-stocks-as-traders-wait-for-brexit-blueprint
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