In This Article:
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Nikkei hits a high, European stocks flat
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Dollar slips as investors bet rates have peaked
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Fed minutes, European PMIs, Nvidia results feature this week
(Updates throughout for European market open)
By Wayne Cole and Lawrence White
SYDNEY/LONDON, Nov 20 (Reuters) - Shares were generally flat on Monday in thin trading ahead of the U.S. Thanksgiving holiday on Thursday and in the absence of major data releases that could give markets direction, while the dollar slipped against major currencies.
Europe's benchmark STOXX index was down just 0.04%, with U.S. futures looking set to follow suit.
The dollar index bottomed out at 103.53, its weakest level since the start of September, as investors appeared to solidify bets that U.S. interest rates have peaked and that the Federal Reserve could start cutting rates next year.
Asian stock markets earlier in the day were livelier as Japanese shares hit highs not seen since 1990, thanks to strong earnings and offshore demand which fuelled a three-week winning streak.
Japan's Nikkei ran into profit taking at the peak but was still up 8.2% for the month so far with the Topix not far behind.
MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.8%, having climbed 2.8% last week to a two-month high.
Meanwhile there were media reports that Israel, the United States and Hamas had reached a tentative agreement to free dozens of hostages in Gaza in exchange for a five-day pause in fighting, but no confirmation as yet.
Black Friday sales will test the pulse of the consumer-driven U.S. economy this week, while the upcoming Thanksgiving holiday made for thin markets.
The flow of U.S. economic data turns to a trickle this week, but minutes of the Federal Reserve's last meeting will offer some colour on policy makers' thinking as they held rates steady for a second time.
Signs of progress in the battle against inflation, in the United States have driven a recovery in stocks this year as investors hope for an end to the cycle of rate hikes that have been policymakers' main tool for fighting price increases on goods.
The S&P is now up nearly 18% for the year and less than 2% away from its July peak.
Yet analysts at Goldman Sachs note the "Magnificent 7" mega cap stocks have returned 73% for the year so far, compared with just 6% for the remaining 493 firms.
"We expect the mega-cap tech stocks will continue to outperform given their superior expected sales growth, margins, re-investment ratios, and balance sheet strength," they wrote in a note. "But the risk/reward profile is not especially compelling given elevated expectations."