Equities Hit Five-Week Highs as Investors Overlook Rising Bond Selloff

Global stocks reached five-week highs on Wednesday as investors largely disregarded an expanding selloff in bonds amid soaring inflation and the resulting hawkish stance of Fed policymakers.

According to Reuters, the two-year U.S. Treasury yields inched up by 70 bps and are on track to hit their highest monthly surge since 2004. However, investors remain largely aloof about the climb in higher yields and the resulting effects on stock market valuations, while opting to repurchase.

MSCI’s broadest measure of global stocks edged higher by 0.2% for the first time since right before the Russian invasion of Ukraine.

UBS Global Wealth Management’s Chief Investment Officer, Mark Haefele contended, "Although there is widespread criticism, it's too early to take the view that the Fed won’t be able to negotiate the fine line of reducing inflation without derailing growth." He added, "Given a higher degree of uncertainty, rather than make a directional play on stocks moving higher, we prefer selected overweight and underweight positions, yielding an overall neutral allocation to equities."

©Photo: JOHANNES EISELE/AFP