GLOBAL MARKETS-Stocks rebound on cyclical surge, gold edges higher

* European tech stocks follow U.S. peers lower
* Oil rebounds, gold rise above $1,800 an ounce
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh

By Herbert Lash
NEW YORK, July 14 (Reuters) - Global equity markets wavered
and gold prices rose on Tuesday after a rollback of California's
reopening hit sentiment, but cyclical stocks surged on Wall
Street as some investors bet a recovery would overcome the
COVID-19 pandemic's spread.
U.S. Treasury yields fell after consumer prices showed core
inflation remained well under the Federal Reserve's target while
euro zone government bonds slid on renewed U.S.-China tensions
and caution over new lockdown restrictions in California.
Europe's broad FTSEurofirst 300 index .FTEU3 dropped 0.79%
and weighed on MSCI's world equity index .MIWD00000PUS after a
decline overnight in Asian equities. The global benchmark index,
which tracks shares in 49 nations, fell 0.14%.
U.S. stocks were mixed, with cyclicals outperforming as
technology shares were hammered both on Wall Street and in
Europe, where the subsector .SX8P fell 2.8% in their biggest
one-day sell-off in just over a month.
On Wall Street, the Dow Jones Industrial Average .DJI rose
1.07% and the S&P 500 .SPX gained 0.32%. The Nasdaq Composite
.IXIC dropped 0.27%.
Technology and tech-related shares have sold off and
cyclicals are doing well, including financials, industrials and
energy stocks, said Tim Ghriskey, chief investment strategist at
Inverness Counsel in New York.
"Every once in a while cyclicals will outperform. These are
the most beaten up securities in the market. But they're not the
safe trade, which is tech-plus. That's where the growth is,"
Ghriskey said.
"But the cyclicals are extremely attractive from a valuation
standpoint and an ultimate recovery standpoint. They have the
most to gain back," he said.
While the rollback of business reopenings may weigh on the
economy, new COVID-19 infections are hitting younger people and
ultimately will not replicate earlier fatality rates, he said.
The market looks beyond what is happening today in terms of
the virus and is anticipating, perhaps incorrectly, that it's
going to die right down, he said.
Oil rebounded. Brent crude LCOc1 was up $0.29 at $43.01 a
barrel. U.S. crude CLc1 was up $0.26 at $40.36 a barrel.
The dollar fell as the euro rose on optimism about the
possibility of a European Union stimulus package and as Wall
Street trended higher.
The euro EUR= rose 0.56% at $1.1404. The U.S. dollar index
=USD , which measures the safe-haven greenback against a basket
of six rival currencies, slid 0.34% to 96.225.
Gold prices inched up, rising above the $1,800 level,
underpinned by concerns over mounting coronavirus cases globally
and as many regions reintroduced curbs to restrict the outbreak.
One of the factors that influences gold is fear, said
Kristina Hooper, chief global market strategist at Invesco in
New York.
"On days when stocks are up and gold is up, part of the
story is the Fed has made stocks attractive to investors, but
there is apprehension that is driving up gold prices as well,"
Hooper said.
U.S. consumer prices increased by the most in nearly eight
years in June as businesses reopened, but the underlying trend
suggested inflation would remain muted and allow the Federal
Reserve to keep injecting money into the ailing economy.
The U.S. Labor Department's consumer price index rose 0.6%
last month, the biggest gain since August 2012, after easing
0.1% in May. The increase ended three straight months of
declines and was driven by the rising price of gasoline and
food.
Tension grew between Washington and Beijing after the United
States rejected China's claims to offshore resources in most of
the South China Sea. The Shanghai index .SSEC fell 0.7% despite official
figures showing Chinese exports and imports topped forecasts in
June, while China continued to buy significant amounts of
commodities, including iron ore. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Global earnings 2020 forecast https://tmsnrt.rs/2Zlafoz
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