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Global equities hold up despite rapid yield rise, Danske says

Danske Research Team pointed to a softer September jobs report as a catalyst for Friday gains across the S&P 500, Nasdaq and Stoxx 600.

Reported · Written up by our desk · Sectors

Danske Research Team said global equities ended last week only 0.5% lower even as yields rose rapidly, with tech and cyclicals outperforming. The firm added that over the prior two weeks, equities were up 0.4%, and it said most of the volatility pressure has been centered in bonds rather than equities.

Danske also argued that strong earnings growth has helped explain equities’ resilience compared with the rates shock. In its view, Friday’s strength was driven by a softer-than-expected September job report, when the S&P 500 rose 0.7%, the Nasdaq gained 1.2%, and the Stoxx 600 added 0.8%.

The team said most sectors finished the session higher, with yield sensitive areas such as consumer discretionary, technology and industrials leading, while equity volatility stayed low on an index level even as the bond volatility gauge MOVE spiked.

Latest closeS&P 500 7,722.72 ▲0.7%|Nasdaq Comp. 27,190.86 ▲1.2%

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