By Riva Gold
Global stocks held steady Friday while U.S. markets were poised to notch fresh records as they reopened after the Thanksgiving holiday.
The Stoxx Europe 600 inched down less than 0.1% in morning trading, echoing a modest drop in commodity prices, but remained near a one-month high. Brent crude oil was down 1.3% at $48.39 a barrel while copper and gold prices also fell, dragging down the energy and basic resources sectors.
Asian markets ended higher, however, while futures pointed to a 0.2% opening gain for the S&P 500, after the Dow Jones Industrial Average, S&P 500 and Russell 2000 all closed at records on Wednesday before the Thanksgiving holiday.
U.S. stocks have enjoyed a bump in recent weeks, bolstered by expectations for reduced corporate taxation and regulation and greater infrastructure spending, ultimately driving growth and inflation.
Those expectations have also strengthened the dollar. The WSJ Dollar Index was down 0.2% after settling Thursday at its highest since 2002.
The stronger dollar "doesn't start to bite yet," said Philip Chandler, a fund manager at Schroders, but if it continues to appreciate at this pace in 2017 it may hurt corporate profits, he said.
Money has also continued to pour out of government bonds, real estate and gold funds, on expectations for higher inflation and interest rates, and into the U.S. equity market, supporting the rally.
In the most recent week, investors continued to rotate out of fixed-income and emerging-market funds and into U.S. equities, according to fund-tracker EPFR Global. The yield on the 10-year Treasury note rose as high as 2.413% on Friday from 2.355% on Wednesday, according to Tradeweb. Yields move inversely to prices.
German 10-year yields were little changed on Friday at 0.244%. German bond funds recorded their biggest outflow since 2009 in the most recent week, according to EPFR Global, following a media report that the European Central Bank will lend more of its holdings to regional banks.
The dollar was last down 0.5% against the yen and 0.4% against the euro.
Earlier, shares in Asia advanced, with Japan's Nikkei Stock Average hitting a 10-month high as a recent decline in the yen against the dollar boosted shares of exporters.
Markets in Hong Kong and Shanghai rose around 0.6%, while Australian stocks added 0.4%. Volumes were muted, however, with U.S. markets due to close early on Friday.
contributed to this article.
Write to Riva Gold at email@example.com
(END) Dow Jones Newswires
November25, 2016 05:41 ET (10:41 GMT)
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