European equities remained near their all-time highs on Monday, driven by record prices for copper and gold, which boosted resources stocks. The Stoxx Europe 600 Index rose by 0.2%, with mining companies like Glencore Plc, Rio Tinto Plc, and KGHM SA leading the gains. Similarly, the MSCI AC Asia Pacific Index advanced for a seventh consecutive day, and futures for the S&P 500 and Nasdaq 100 also edged higher.
Key highlights include:
- Copper reached its highest-ever price, pushing futures on the London Metal Exchange above $11,000 for the first time.
- Gold hit a new record, spurred by concerns over Middle East tensions following the death of Iranian President Ebrahim Raisi.
- Crude oil prices remained steady.
The surge in commodity prices is raising concerns about inflation, potentially affecting the recent rally in equity and bond markets. Despite this, investors are focusing on strong economic growth, robust earnings, and the possibility of policy easing by central banks like the Federal Reserve and the European Central Bank.
Gene Salerno, Chief Investment Officer at SG Kleinwort Hambros Bank Ltd., commented that investors are not overly concerned about the economy’s health and are not too worried about the commodity rally as it is only one aspect of inflation, which is showing signs of easing in other areas such as the job market.
Recent market activity has been influenced by expectations of when the Federal Reserve might start cutting interest rates. Last week, the Dow Jones Industrial Average surpassed 40,000 for the first time, and the Bloomberg dollar index dropped following data showing US inflation had eased more than expected.
Despite some policymakers, including the ECB’s Martins Kazaks, urging caution on rate cuts, investors will be closely monitoring speeches from Federal Reserve officials, including Governor Christopher Waller, for further insights on US economic and monetary policy.
Meanwhile, crude oil prices remained stable despite the geopolitical tensions following the death of the Iranian president amidst the ongoing conflict between Israel and Hamas in Gaza.
JPMorgan European Discovery Trust plc (LON:JEDT) is an investment trust company. The Investment Trust JEDT objective is to achieve capital growth from a portfolio of quoted smaller companies in Europe, excluding the United Kingdom.
