Global stock indexes cooled off on US tax reform doubts

Wall Street

Global stock indexes cooled off on Friday as signs that US tax reform could be delayed impeded the market’s momentum.

MSCI’s global stock index, which tracks shares in 47 countries, declined 0.2 per cent, slipping further from a record level. On Thursday, the global index fell 0.4 per cent following 10 straight days of gains.

The MSCI world index has surged more than 20 per cent so far this year, and some investors believe a pullback is due.

“The pause that the market is currently in is directly related to what’s going on from a tax standpoint,” said Jim McDonald, chief investment strategist for Northern Trust Corp.

Adding insult to injury, the pullback in stocks, as well as the softness in high-yield “junk” bonds, did little to support traditional safe havens.

Benchmark 10-year US Treasury notes last fell 20/32 in price to yield 2.4002 per cent. The 30-year bond last fell 48/32 in price to yield 2.8813 percent.

Meanwhile, German government bond yields climbed to their highest in over a week as euro zone bonds were sold across the board for a second consecutive day. The yield on Germany’s 10-year government bond, the benchmark for the bloc, hit 0.40 percent for the first time since Oct. 27.

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