GLOBAL MARKETS-World shares hit new peak on stimulus hopes, oil gains

* MSCI ACWI hits record peak spurred by Wall Street
* Earnings, U.S. stimulus hopes offset weak U.S. jobs report
* Bond yields rise on increased inflation expectations
* Global currencies vs US dollar https://tmsnrt.rs/2PmYOcE

By Herbert Lash
NEW YORK, Feb 5 (Reuters) - - A gauge of global equity
markets scaled a new record on Friday on investor expectations
of further stimulus from Washington and economic revival hopes
that also lifted crude oil prices to nearly $60 a barrel.
MSCI's all-country world index .MIWD00000PUS , which
captures equity performance in 50 countries but is heavily
weighed to U.S. stocks, especially big tech, rose 0.63%. The
benchmark was on track to post its best week in three months.
Longer-term U.S. Treasury yields rose after a Labor
Department report showed U.S. jobs rebounded less than forecast
in January, bolstering hopes Congress will approve President Joe
Biden's $1.9 trillion COVID-19 relief package.
The closely watched employment report showed job losses in
December and November were deeper than initially thought,
underscoring the need for additional relief money. Gold rose as the dollar retreated slightly as investors will
continue to bank on the greenback with Treasury yields rising.
Tom Hayes, chairman and managing member at hedge fund Great
Hill Capital LLC in New York, said the market was looking
through the short-term disappointment in the employment report.
"It's very hard to get too pessimistic about downward
revisions when you have three tailwinds at your back, namely the
stimulus, the vaccinations and (declining infection) cases and
earnings," Hayes said.
Job losses are still concentrated in retail, leisure and
hospitality and healthcare, particularly in healthcare and
nursing homes, "so this is all COVID-related issues," he said.
As more people get vaccinated, jobs will come back, which is
driving investor sentiment, Hayes said.
The Nasdaq and S&P 500 also hit new highs as
stronger-than-expected corporate results in the fourth quarter
and companies on track to post earnings growth for the first
quarter instead of a decline have boosted sentiment.
The Dow Jones Industrial Average .DJI rose 0.31%, the
Nasdaq Composite .IXIC added 0.56% and the S&P 500 .SPX
gained 0.46%, led by Amazon.com Inc AMZN.O , Google-parent
Alphabet Inc GOOGL.O and Tesla Inc TSLA.O .
The three companies, along with Apple Inc AAPL.O ,
Microsoft Corp MSFT.O and Facebook Inc FB.O , are the top six
components of MSCI's all-country world index.
In Europe, stocks were little changed at the end of an
upbeat week, whose sentiment cooled on the disappointing U.S.
jobs data and declining German industrial orders.
The broad STOXX 600 .STOXX posted its best weekly
performance since November, rising 3.5%, despite a lackluster
session on Friday.
German Economy Ministry data showed domestic orders fell by
0.9% in December, while orders from abroad decreased by 2.6%.
Contracts from the euro zone tumbled by 7.5%. Despite trending lower against the euro and Japanese yen,
the dollar headed for its best weekly gain in three months. The
U.S. dollar index =USD stood near a two-month high, up 1.1% so
far this week.
The dollar index =USD fell 0.551%, with the euro EUR= up
0.69% to $1.2045. The yen JPY= strengthened 0.19% versus the
greenback at 105.35 per dollar.
Oil hit its highest level in a year, above $59 a barrel,
supported by hopes of a quicker economic revival and supply
curbs by the Organization of the Petroleum Exporting Countries
and its producer allies.
Brent crude futures LCOc1 rose $0.42 to $59.26 a barrel.
U.S. crude futures CLc1 gained $0.47 to $56.7 a barrel.
Government bond investors expect an uptick in inflation
after the unemployment report. Breakeven rates on 10-year
Treasury Inflation-Protected Securities (TIPS) US10YTIP=RR ,
which measure average annual inflation expectations for the
coming decade, have jumped to 2.19%, the highest level since
mid-2018.
The 10-year U.S. Treasury US10YT=RR note rose about 1
basis point to 1.1584%, after briefly rising to the highest
yield since March.
The net read from the unemployment report is that it
supports a steeper yield curve, said Steven Ricchiuto, U.S.
chief economist at Mizuho Securities USA LLC in New York.
"The big thing is the curve," he said.
Bond yields rose in Europe as well, with Germany's 30-year
government bond yield DE30YT=RR climbing back into positive
territory for the first time since September.
MSCI's gauge of Asian shares outside Japan .MIAPJ0000PUS
rose 0.4%, while Japan's Nikkei .N225 rallied 1.5%.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country World Index Market Cap http://tmsnrt.rs/2EmTD6j
Recovery in earnings https://tmsnrt.rs/3oLYFfL
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>