World stocks traded just below record highs on Monday, pausing ahead of this week’s central bank meetings, economic data and earnings, while oil prices rose to their highest in over a week after blockades began shutting down two Libyan oilfields.
European equity markets were lower, while U.S. stock futures dipped, with the Martin Luther King Jr. holiday in the United States meaning subdued trading activity. Still, MSCI’s s all-country index is up almost 2.5% for the first three weeks of the year, as an easing in U.S.-China trade tensions and signs that the worst may be over for the world economy bolster sentiment. The S&P 500 a broad gauge of U.S. shares has gained just over 3% and the tech-heavy Nasdaq almost 5%.
In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.25% on Monday after rising to its highest since June 2018. Japan’s Nikkei gained 0.2% to near its highest in 15 months. In China, the blue-chip CSI300 index rose 0.7%. The yuan rose to a six-month high.
US corporate earnings this week include Netflix, Intel Corp and Texas Instruments, while the European Central Bank, Bank of Canada and Bank of Japan hold policy meetings. “Optimism is high, mainly, though, because we appear to have clicked back to a world of growth enthusiasm,” said Chris Bailey, European Strategist at Raymond James in London.
“The upcoming earnings season is going to be fascinating … Netflix and Intel on Tuesday and Thursday in the U.S. are going to be insightful re the tech sector, whilst UBS tomorrow, ASML on Wednesday and Ericsson Friday will be helpful on perceptions towards Europe.
The Bank of Japan meets on Tuesday, while the ECB is expected to open a key strategic policy review when it gathers on Thursday.
Friday brings the release of key business activity data, while the World Economic Forum in Davos is also in focus, with U.S. President Donald Trump expected to discuss trade disputes with European Commission President Ursula von der Leyen. Oil prices rose to their highest in more than a week since two large oil fields in Libya began shutting down