An index of world stocks dipped yesterday as investors locked in a quarterly gain that has given equities their best start to a year since 2012, while the dollar inched lower after a Federal Reserve official said the US central bank was in no rush to tighten policy.
US stocks indexes were nearly flat in late-morning trading. The S&P 500 was still on track to gain about six per cent for the first quarter, its biggest quarterly gain since 2013.
Emerging market equities fell sharply though, with the MSCI emerging markets index down 1.1 per cent yesterday. MSCI’s EM stocks index is up 12.5 per cent on a dollar-adjusted basis.
Shares saw profit-taking as traders squared up for the quarter. There was remaining nervousness over South Africa’s sacking of its respected finance minister, which sent the rand tumbling again. World stocks as measured by the MSCI world equity index were down 0.3 per cent yesterday but up 6.6 per cent for the quarter so far.
In the US, the Dow Jones Industrial Average was down 22.98 points, or 0.11 per cent, to 20,705.51, the S&P 500 had gained 0.79 points, or 0.03 per cent, to 2,368.85 and the Nasdaq Composite had added 7.58 points, or 0.13 per cent, to 5,921.92.
The dollar index was down 0.1 per cent after New York Fed president William Dudley said the central bank was in no rush to tighten monetary policy and following uninspiring data on the US economy.
“A lot of the air went out of the balloon today because we didn’t get quite the positive data set that we wanted and we’re still getting relatively cautious commentary from the Fed,” said Boris Schlossberg, managing director of FX strategy at BK Asset Management.
Over the quarter the greenback has fallen 1.8 per cent, its worst showing in a year, on doubts that US President Donald Trump was not prioritising – and did not have the necessary power to push through Congress – the economic reforms that had driven the dollar to 14-year highs at the start of the year.
Next week promises to be an interesting start to the second quarter. Mr Trump and Chinese President Xi Jinping will meet in Florida and the US president has set the tone for a tense few days by tweeting that Washington could no longer tolerate massive trade deficits and job losses.
China’s Vice Foreign Minister Zheng Zeguang said yesterday that his country does not have a policy to devalue its currency to promote exports, and neither does it seek a trade surplus with the United States.
In commodities, oil prices fell yesterday after a three-day rally ran out of steam.
Brent oil were down 38 cents at $52.58 a barrel, while US crude futures were down 15 cents at $50.20 a barrel after slipping back below $50.
Both were on track to end the quarter around seven per cent lower.