GLOBAL MARKETS-World shares hit highs as markets focus on earnings

* Reuters Live Markets blog: LIVE/

(Updates prices, adds detail on COVID-19 cases)
By Elizabeth Howcroft
LONDON, April 19 (Reuters) - World shares hit record highs
in the European session on Monday, as markets were generally
upbeat about the prospects for a global economic recovery from
COVID-19, ahead of a busy week for earnings.
Europe's STOXX 600 rose to a record high before easing some
gains, up 0.1% at 1105 GMT .STOXX . Asian shares hit one-month
highs overnight.
MSCI world equity index, which tracks shares in 49
countries, also climbed to a new peak, up 0.2% .MIWD00000PUS .
But U.S. stock futures pointed to a lower open for Wall
Street, after the S&P 500 and the Dow closed at record highs in
the previous session. Matthias Scheiber, global head of portfolio management at
Wells Fargo Asset Management cited low interest rates, the
rollout of COVID-19 vaccines and the fiscal stimulus package in
the United States as reasons for his bullish stance on equities.
"Risk is coming down, volatility is coming down … we see the
slow reopening of global economies, the rollout of the vaccine
and the huge catch-up in demand so from that perspective it
should be positive for economic growth."
"We had a strong rally in cyclical and value stocks since
the start of this year - we would like to see confirmation in
the earnings."
Earnings from IBM IBM.N and Coca-Cola COKE.O are due
later in the session. Netflix NFLX.O reports on Tuesday. Later
in the week, American Airlines AAL.O and Southwest LUV.N
will be the first major post-COVID cyclicals to post results.
The European Central Bank meeting on Thursday will also be
in focus this week. ECB President Christine Lagarde said last
week that the euro zone economy is still standing on the "two
crutches" of monetary and fiscal stimulus and these cannot be
taken away until it makes a full recovery. The benchmark U.S. Treasury yield, which dropped as low as
1.528% last Thursday, was at 1.5764% US10YT=RR .
In currency markets, the dollar index was down 0.6% at its
lowest levels in more than a month =USD , at 91.052, having
weakened since its recent peak of 93.439 at the end of March.
Dollar-yen was also down 0.6%, changing hands at 108.145
JPY=EBS .
The euro was up 0.5% versus the dollar at $1.20435
EUR=EBS .
"We have been highlighting over the past two months that USD
could bottom out, in contrast to consensus, and believed that
this would be a tactical problem for EM and for certain
commodity trades," wrote JP Morgan's head of global and European
equity strategy, Mislav Matejka, in a note to clients. "We think
the risk of a firmer USD, through rising US-Europe interest rate
differential, is not finished."
Matejka also said that, although there is the technical
potential for a correction in equities, he would not cut stocks
exposure on the six- to nine-month horizon.
"We think that it is more likely that we will be raising our
year-end targets, rather than reducing them, as we move through
the summer," he said.
Likewise, Wells Fargo Asset Management's Matthias Scheiber
said "We believe we are in the 'buy the dip' environment at this
moment given that both fiscal and monetary policy are very
supportive, so if we would see a correction … we would probably
increase the equity position.”
Bitcoin was up 1% BTC=BTSP at around $56,850, nursing
losses from Sunday, when it plunged as much as 14% to $51,541.
Oil prices fell as rising COVID-19 infections in India
prompted concern than stronger measures to contain the pandemic
would hurt economic activity. A recent surge in COVID-19 cases could see major parts of
Japan slide back into states of emergency, with authorities in
Tokyo and Osaka looking at renewed curbs. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
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Global asset performance http://tmsnrt.rs/2yaDPgn
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