Global stocks wavered Thursday as investors weighed whether recent concerns about global growth marked a blip in market sentiment or a permanent turn away from the buoyancy that defined the beginning of 2019.
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In Europe, the Stoxx Europe 600 was up 0.4% in morning trading. Asian stocks were mostly lower with the Shanghai Stock Exchange down 0.9% and Japan’s Nikkei down 1.6%.
U.S. futures pointed to opening rises of 0.1% for both the Dow Jones Industrial Average and the S&P 500.
Negative sentiment has weighed on equities this week and pushed bond yields lower across the globe as investors flock to haven assets. The 10-year U.S. Treasury on Thursday fell to 2.358%, from 2.374% on Wednesday. Yields move inversely to prices.
In recent sessions investors have been faced with a series of signals that global growth could be set to slow, with the U.S. yield curve inverting just as the yield on 10-year German government bonds turned negative, both events which are considered harbingers of a global downturn.
Still, U.S. central bank officials spoke out Wednesday, suggesting it is still too soon to begin cutting rates, which is what markets are forecasting when the yield curve inverts.
Nevertheless, many investors say the recent market jitters are unjustified and expect the rally at the beginning of 2019 to continue apace.
“There is just too much pessimism built up that growth will do badly and I think that is overrated,” said David Zahn, head of European fixed income at Franklin Templeton.
Investors will thus be watching closely when the U.S. government posts final estimates of growth in the last three months of 2018, which was initially estimated at a 2.6% annualized rate from the previous quarter.