Investor Hopes for Fiscal Boost Drive Stocks to Historic Peaks

 

As global markets look ahead to Friday, the combination of large-scale U.S. fiscal spending and ongoing monetary easing is driving an upbeat mood, pushing stocks to close a volatile week on a high note.

Wall Street heads into Friday at new peaks, lifting the MSCI's global equities index to a record level with a 3.3% gain over the week. Even Chinese stocks, which might be expected to struggle under Trump's proposed tariffs, have defied expectations.

Chinese blue chips surged nearly 6% this week, with over half of the gains on Thursday, likely driven by hopes for a substantial stimulus from Beijing to offset trade war impacts.

However, markets have been disappointed several times recently after rising in anticipation of bold Chinese stimulus announcements. The week-long session of China's National People's Congress Standing Committee wraps up in the evening with a news conference that could either boost or temper these expectations.

In Europe, stock futures for Britain's FTSE and Germany's DAX indicate a slight 0.2% rise, but challenges loom, including the threat of sweeping tariffs from Trump. The FTSE has declined this week, notably after the Bank of England warned of higher inflation risks, which could slow the pace of rate cuts.

Meanwhile, political uncertainty in Germany adds to market tension.

A potential snap election is on the horizon after Chancellor Olaf Scholz’s attempt to approach opposition leader Friedrich Merz was not only rejected but resulted in Merz calling for an immediate confidence vote. Scholz’s three-way coalition broke down on Wednesday when he dismissed Finance Minister Christian Lindner of the fiscally conservative Free Democrats after prolonged budget disputes.

Investors, who on Thursday drove one debt risk measure to a record high, would welcome any signs of political stability.

 

 

 

 

 

 

 

 

 

 

 

Paraphrasing text from "Reuters"all rights reserved by the original author.