Europe's Stoxx 600 index edged higher, as travel and leisure and construction stocks gained while energy and real estate underperformed. Contracts on the S&P 500 and the tech-heavy Nasdaq 100 steadied following the worst week of the year on Wall Street for stocks and bonds. An Asian equity benchmark headed for its lowest close in more than a month.
“We are certainly continuing to be very cautious on equities,” Nannette Hechler-Fayd'Herbe, chief investment officer at Credit Suisse International Wealth Management, said on Bloomberg Television. “We find at the moment there is a disconnect in valuations versus where interest rates by the Fed — but also by other central banks — are going to be for the remainder of the year.”
“While the recent move higher in front-end rates is supportive of the notion that the Fed may remain restrictive for longer than appreciated, the equity market is refusing to accept this reality,” a team led by Michael Wilson wrote in a note.