Global equities shrug off bond sales

"Global equities shrug off global bond sales". That's the news from Financial Times' weekend edition. Here's market coverage from FT.com:

Global equities shrugged off the rout in government bonds this week, with markets on both sides of the Atlantic closing on Friday near records.

Leading indices on Wall Street were near lifetime peaks, while European and UK stocks closed at their highest level since 2000. Equities were under heavy selling pressure earlier in the week as the yield on the 10-year US Treasury bond struck a five-year high at 5.33 per cent amid concerns that strong US economic growth would rule out interest rate cuts by the Federal Reserve this year.

European government bonds have also been trading at five-year peaks recently on expectations that eurozone rates could be raised by more than expected.

But sentiment turned round sharply on Wednesday as investors felt that the bond market sell-off had been overdone. Benign US inflation data on Friday further improved investors’ mood, with core inflation in May coming in at 0.1 per cent, against an expected 0.2 per cent. This helped yields stabilise.

On Wall Street, the S&P 500 index closed up 1.7 per cent on the week, and the Dow Jones Industrial Average up 1.6 per cent. In London, the FTSE 100 rose 3.5 per cent over the five-day period to finish within 200 points of its all-time high late in 1999.

For more on recent comments from the European Central Bank, read on at the link above. Happy Father's Day, everyone.