US, global stocks rise amid revised IMF forecast
Tuesday marketed the fourth consecutive day of gains for US stocks, as earnings optimism uprooted hesitations emanating from the less-than-stellar NFIB Business report. Market sentiment improved on Tuesday following expectations of better-than-expected Q2 earnings in the private sector. Earnings reports have fuelled the stock exchange’s bull market in recent weeks. On Tuesday, this optimism extended to global stocks, as well as the US exchange. The MSCI All-Country World Index, which provides a broad measure of global stock performance excluding US-based companies, advanced 0.8 percent, helping to push global stocks forward. The MSCI Index triggered a similar rise in the S&P 500, which has advanced more than 2.3 percent over the past five days.
At the end of Tuesday’s North American session, the S&P 500 was up another 12 points to 1,652.32. Like the S&P, the Dow Jones Industrial Average also advanced more than 2.3 percent over the same five-day period. On Tuesday the Dow closed the New York session at 15,300.34 (+76 points). In related news, the NASDAQ Composite added 0.6 percent to close the day at 3,504.26.
The market’s advance came against the backdrop of a revised growth forecast for 2013-14, this time from the International Monetary Fund. In its latest report, the IMF revised its April growth forecast, warning that global economic growth will remain weak for the rest of 2013. The IMF expects the global growth rate to be 3.1 percent for the rest of the year, in-line with the 2012 rate. The forecast also warned developing nations to be on high alert for US Fed tapering, which is expected to commence as early as this year.
The global economy is still in its first gear, the IMF report warned. Both developed and emerging markets haven’t fully recouped the devastating losses of the 2008 recession. The global economy remains uneven and highly volatile to shocks emanating from US monetary policy, Eurozone debt crises and Japanese stock market volatility. Despite the murky forecast, US stocks continue to enjoy a strong year, a trend expected to persist so long as quarterly earnings match the upbeat forecasts.
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