International stocks rose Monday, extending a rally that has pared some of this year’s losses, while U.S. markets were set to stay closed for the Memorial Day holiday.
The Stoxx Europe 600 added 0.5%, led by shares of technology and luxury-goods firms. London’s FTSE 100 was flat and Germany’s DAX climbed 0.7%.
In Asia, the Shanghai Composite Index added 0.6% and Hong Kong’s Hang Seng jumped 2.1%, powered by the relaxation of some Covid-19 curbs in China. Shanghai’s Vice Mayor Wu Qing said over the weekend that the authorities will loosen the conditions under which companies are able to resume work this week, and the city’s government laid out a 50-point plan for accelerating the economic recovery. The measures include tax cuts for businesses and subsidies for purchases of electric vehicles, the official Xinhua News Agency said.
Futures for the S&P 500 gained 0.7%. The U.S. stock market is due to reopen Tuesday, as is the Treasury market. Yields on government bonds retreated from their 2022 highs in the run-up to Friday’s close, helping lift stocks after a weekslong drubbing. The S&P 500 snapped a seven-week losing streak Friday and posted its biggest weekly gain since November.
Also driving the rally were data showing that U.S. consumers have kept boosting spending, and the expected easing of lockdowns in China that had slowed the world’s second biggest economy. Technical factors including the unwinding of short positions, or bets against the market, have helped stocks bounce back too, investors say.
Still, some money managers caution that the pickup in stocks and bond prices may be a short-lived blip in a longer-running retreat. They say most of the factors that have contributed to this year’s losses—the war in Ukraine, higher interest rates set by the Federal Reserve and a slowing economy—are still in place.
“We are about to see a bear-market rally—or are in the midst of it,” said Daniel Egger, chief investment officer at St. Gotthard Fund Management.
…..
