European markets end higher
The global market surge which has led to the Dow Jones Industrial Average finally breaking through the 20,000 has also seen other markets move higher.
The records set by the Dow, S&P and Nasdaq Composite, boosted by the Trump rally and reasonable updates from US stalwarts such as Boeing, have helped lift European markets. Good results from Logitech and Banco Santander were also a factor in the confident mood on the continent.
But with the dollar weakening and pushing the pound to six week highs - sterling is now up 0.8% at $1.2620 - the FTSE 100 has missed out on much of the gains. The leading UK index is packed with overseas earners who have benefited from a weak pound but tend to lose ground when sterling strengthens. So the final scores in Europe showed:
- The FTSE 100 edged up 0.2% or 14.09 points to 7164.43
- Germany’s Dax rose 1.82% to 11,806.05
- France’s Cac climbed 0.99% to 4877.67
- Italy’s FTSE MIB finished 0.42% higher at 19,582.23
- Spain’s Ibex ended up 1.73% at 9549.3
- In Greece, the Athens market added 1.96% to 659.19
On Wall Street the Dow is now up 144 points or 0.7% at 20,056.
On that note, it’s time to close for the evening. Thanks for your comments, and we’ll be back tomorrow.
There is much talk about whether the current stock market levels mean we are in a new bubble phase (leading fund manager Neil Woodford recently compared the euphoria of recent months to the dotcom boom and bust). But Laith Khalaf, senior analyst at Hargreaves Lansdown, said:
Stock indices in the US and UK may well be at or near record highs, however when the earnings generated by companies in these markets are factored in, stock valuations show neither the extreme pessimism of 2008, nor the irrational exuberance of 1999. This means they are trading somewhere in the middle of their range, so are neither exceptionally cheap or hideously expensive. In the short term the stock market could move in either direction, but for long term investors it still makes sense to keep a healthy slug of their portfolio in equities.
Meanwhile bonds have come under pressure of late, as it looks like the US central bank is in the mood to raise interest rates this year. However there have been many false dusks for the bond market, which has defied expectations since ultra-loose monetary policy was initiated all those years ago in response to the financial crisis. Central banks in the UK, Europe and Japan are still engaged in stimulative activity, and while the US Fed is starting to push in the opposite direction, it’s likely to err on the side of caution lest by raising rates too soon it damages the US economy, and propels an already strong dollar even further upwards. While the best days for the bond market may be behind us, there‘s no sign that interest rates are going to return to pre-crisis levels any time soon, which acts as an anchor on rising yields.
And here’s the response to the Dow crossing 20,000 from the man most analysts say helped the recent surge in stock markets. Via Twitter of course:
Great! #Dow20K https://t.co/wXFhXBLgag
— President Trump (@POTUS) January 25, 2017
Away from the Dow for a moment, and early elections in Italy could be on the cards after a call ruling. Reuters writes:
Italy’s constitutional court said on Wednesday that part of a contested electoral law was invalid, but left much of the system intact in a ruling that could open the way for early elections in 2017.
In a written verdict, the court rejected the idea that national elections could be held over two rounds, but agreed that any party which took at least 40 percent of the vote straight out should win an automatic parliamentary majority.
The court said the amended law could now be used immediately if elections were called. A vote is not scheduled until early 2018 but former Prime Minister Matteo Renzi, who still heads the ruling Democratic Party, has said he wants a ballot held as soon as possible.
The news has taken some of the shine off the Italian stock market, with the FTSE MIB losing much of its earlier gains. It is now up 0.43% at 19579 having at one point reached 19746.
It is not just the Dow in uncharted territory.
The S&P 500 and Nasdaq Composite both ended at new highs on Tuesday, and in morning trading they have added to their gains. The S&P is currently 0.6% higher, while Nasdaq is 0.74% better.
And some seem confident the US rally will continue. Jasper Lawler, senior market analyst at London Capital Group, said:
For all the supposed uncertainty surrounding the new President, it only took two full days in office for the Dow to breach 20,000. It comes a day after the S&P 500 hit a new record high.
Dow 20k came on the same day President Trump was preparing to sign an executive order to build a wall on the US-Mexican border. The big industrial giants including Caterpillar and General Electric led the gains on the expectation of an increase in infrastructure spending under Trump. A lot of diggers will be needed to build the wall! In reality, Trump can start the building, but will need help from Congress to get it finished.
Building a Wall on the US-Mexican border was Donald Trump’s most famous and probably most controversial campaign promise. He will also sign an executive order designed to limit immigration. Actually following through with his “Great Wall” is a sign of intent. It is our view that the gains in the stock market are not just a function of companies winning infrastructure business. Investors are gaining certainty from Trump turning his promises to reality.
There are a number of psychological factors at work when the stock market crosses these big barriers that we will be watching. Widespread reporting of Dow 20k will create a FOMO (fear of missing out) effect on the under-invested, generating more buying interest. On the other hand, the 20,000 level will attract profit-taking from some long-time stock market bulls, causing a counteracting selling force.
We remain confident in the durability of the US stock market rally. If Donald Trump will build a wall, there’s every reason to believe he will cut taxes, increase spending and cut regulation- all good things for US companies.
There was some relief among analysts that the Dow had finally made it. Michael Hewson, chief market analyst at CMC Markets UK, said:
In all honesty it couldn’t have come a moment too soon, finally putting us out of our misery so we can start to focus on something else more important.
On a serious note, while it’s important to acknowledge the breaking of a significant milestone, in the broader scheme of things it probably doesn’t matter that much, apart from giving investors a feel good boost.
Of more importance is whether or not it is able to sustain these gains at a time when US stocks are already considered expensive.
It looked for a while as if the Trump rally which followed the election of the US president was about to run out of steam, as the Dow tried and failed a couple of times to breach the 20,000 barrier. Connor Campbell, financial analyst at Spreadex, said:
The Trump rally seemed to have disappeared as Christmas turned into the New Year. However, with the thin-skinned President now in power and talking about stripping back regulations and building his infamous wall, investors have begun to get excited all over again. Following yesterday’s late rally the Dow Jones rose by 130 points as the bell rang on Wall Street, in the process breaking that 20,000 psychological barrier.
These good vibes travelled over to Europe, where the DAX and CAC rocketed 2% and 1.2% respectively. That leaves the German index at its highest point since May 2015, and only 600 points from its own all-time record.
It wasn’t all explosive growth for the Western markets this Wednesday. The FTSE could only manage a paltry 0.3% rise, laughable in the face of what was produced elsewhere, thanks to the pound’s continued recovery. With Theresa May announcing that the government would produce a Brexit whitepaper sterling’s early growth was firmed up, the currency benefiting from the increasing clarity on the how Britain intends to divorce the EU. Against the dollar it jumped by 0.7%, hitting its best level since mid-December, while against the euro it crossed 1.17 for the first time since January 6th. It will be interesting to see if the pound can continue to build on these gains tomorrow, especially if a bill on Article 50 is actually produced.
Here’s CNBC covering the moment the Dow passed 20,000, pointing out that unlike the last time it attempted to cross this level, this move comes after a number of businesses including Boeing have reported well received updates.
WATCH: The moment that the Dow hit 20,000 for the first time ever pic.twitter.com/0fvzncrKtP
— CNBC Now (@CNBCnow) January 25, 2017
And here are the big movers so far in the Dow:
Boeing is up after its results, while the likes of Caterpillar are expected to benefit from Trump’s plans to build a wall on the Mexican border.
Updated
The Dow has breached the 20,000 barrier just two months after crossing through 19,000, as the rally following Donald Trump’s election as US president hit its stride.
The new Wall Street record comes after a few attempts at the 20,000 barrier. Dominic Rushe writes:
The Dow Jones industrial average finally broke through the 20,000 barrier on Wednesday morning – a historic high for the leading stock market index and one it has been close to breaching since Christmas.
The Dow, which first nearly topped 20,000 on 13 December and again on 6 January, when it came within 0.37 points of the landmark, finally broke through after the opening bell was rung on Wall Street by Ashton Poole, CEO of lender Triangle Capital. The closing bell will be rung by executives from InBev, brewers of Stella Artois but whether the Dow’s rise will go flat by then remains to be seen.
The market had rallied sharply in the wake of Donald Trump’s presidential victory but seemed to loose steam ahead of his first day in office. It broke the barrier of Wednesday after infrastructure stocks rose sharply ahead of the market’s open, boosted by Trump’s renewed pledge to build a wall along the Mexican border and talks of massive infrastructure investment. The Dow record comes as the S&P 500 index, tech-heavy Nasdaq and London’s FTSE 100 stock market index have all hit record highs.
Updated
So is this a bubble or something sustainable? Neil Wilson at ETX Capital said
The Dow has capped a remarkable rally since Donald Trump’s election by finally breaking the 20,000 level. It’s psychologically huge and, after a bit of pullback ahead of the inauguration, really confirms that the ‘great rotation’ from bonds to stocks is definitely upon us. Fears about protectionism are running second to optimism about inflation and growth – for now at least.
Donald Trump’s election victory, far from roiling markets, has been greeted with universal optimism about what it means for global growth. Something like $3trillion has been pulled from bonds and $3trillion pumped into equities. President Trump is bound to take credit for the rally, and he may well be justified to some degree...
The question now is how long can this last? Economists are usually unwise to make predictions, so it’s worth considering both potential outcomes.
One argument says that Trump will usher in a Reaganesque shift in the US economy, fuelling a massive reallocation of investment from cash to productive capital...
Trump’s first steps as president have confirmed much of what investors had hoped for and that he’s extremely pro-business and light on regulation for energy and financials. That’s what’s driving this renewed rally.
The other argument claims that this is a massive bubble, irrational exuberance of the worst kind that will come unstuck when Trump fails to deliver the reflationary policies that the market is pinning its hopes on...
However, bull markets normally only turn into bear markets on an expected downturn in the real economy. There is little evidence that the US is heading for recession – quite the reverse as Trump is ushering a new era of pro-business policies that affirm growth prospects.
We are seeing a massive shift in investor sentiment that has seen money pour out of bonds and into equities around the world. This is a major recalibration in global stocks and bond markets – ie, not a bubble in the pure sense, although it might be rising faster than is natural.
[If] this is a real rotation from bonds into stocks, ending a 30-year bond bull market, there is still a huge amount of cash piled up that could yet pour into equities and power further gains through 2017. It might not be too long before 21,000 is in sight.
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Dow hits 20,000
And it’s there! The Dow Jones Industrial Average is up 116 points and has crossed through 20,000 for the first time.
BREAKING: Dow Jones industrial average eclipses 20,000 for the first time; cheers from the floor of the New York Stock Exchange.
— The Associated Press (@AP) January 25, 2017
Updated
Just a couple of minutes now until Wall Street opens and the futures are suggesting the Dow Jones Industrial Average could indeed make 20,000 for the first time.
The Trump rally and some positive trading updates from the likes of Boeing and hard drive maker Seagate look set to help push markets higher.
BT: investigations into Italian scandal continue
Elsewhere, shares in BT are struggling to make any ground after Tuesday’s 21% slump in the wake of an accounting scandal at its Italian business and a weak outlook for a couple of its other divisions.
They have edged up 0.7% to 305.1p, but this is not exactly a big dent in Tuesday’s £8bn loss.
Meanwhile Italian prosecutors have confirmed they are investigating BT Italy. Milan prosecutor Fabio De Pasquale told FastFT that the probe was focused on allegations of “false accounting and embezzlement”, as reported on Tuesday.
And to add to BT’s woes, the situation is also being looked at by the Financial Reporting Council, which said: ”We are aware of BT’s statement about its review of accounting issues in its Italian business and we will consider if these matters require the FRC to investigate whether the auditors fulfilled their duties.”
Elsewhere, the head of BT Europe Corrado Sciolla was said on Tuesday to be resigning over the scandal, and now Reuters is reporting that Luis Alvarez, the head of BT Global Service, is expected to take over the running of the European division.
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IG reckon that Wall Street traders can get the Dow 20k hats out.
Dow Jones 20,000 looks set to be hit today..
— IGSquawk (@IGSquawk) January 25, 2017
US Opening Calls:#DOW 19995 +0.41%#SPX 2288 +0.36%#NASDAQ 5127 +0.51%#IGOpeningCall
I presume we get a tickertape parade? Will be disappointed if not. https://t.co/qory0Il0i3
— Chris Beauchamp (@ChrisB_IG) January 25, 2017
New York trading begins in 90 minutes time....
Could the Dow hit 20,000 today?
After weeks of near-misses, could the Dow Jones finally hit the 20,000 point mark today?
The global stock market rally today is raising speculation that the Dow could hit this benchmark for the first time; it closed at 19,912 on Tuesday night.
With every European stock market up today, the futures market suggests Wall Street will follow suit, helped by optimism that Donald Trump’s plans for infrastructure spending will boost corporate profits.
20,000 is just a number, of course - but some traders would be happy to get the issue out of the way.
Please free us from the Dow 20,000 oppression today!
— Ivan the K™ (@IvanTheK) January 25, 2017
Dow 20K klaxon at the ready
— Mike van Dulken (@Accendo_Mike) January 25, 2017
If it does happen, expect @realDonaldTrump to take the credit....
The US dollar has dipped to a seven-week low against a basket of other major currencies (including the pound) this morning.
Chris Saint, senior analyst at Hargreaves Lansdown Currency Services, says there is “broad-based selling pressure on the dollar”.
Bloomberg has more details:
Pound marches to six-week high with U.S. dollar on the defensive https://t.co/Lt8FUKaePN pic.twitter.com/52cIPD155X
— Bloomberg Canada (@BloombergCA) January 25, 2017
Boom! The pound just hit $1.26 for the first time since December 14.
Newsflash from parliament: Theresa May has just revealed that the government will publish a white paper outlining its Brexit plan.
#Breaking Government will publish White Paper outlining priorities in Brexit negotiations, Prime Minister Theresa May tells MPs #PMQs pic.twitter.com/LLbzhcg2ya
— Press Association (@PA) January 25, 2017
That may please the City, as it will more insight into the government’s ambitions for the EU exit negotiations.
Andrew Sparrow’s Politics Live blog has all the details:
France’s credit rating could come under threat if populist far-right Marine Le Pen reached the final stage of the country’s presidential race, an official from Moody’s has said.
Reuters has the story:
Asked whether Le Pen progressing to the second round would prompt Moody’s to move the outlook on France’s Aa2 credit rating to negative, Dietmar Hornung said, “That is the obvious thing.”
He gave the example of how Moody’s waited until after Britain’s vote to leave the European Union to put the UK’s rating on a negative outlook, however.
The negative impact of the rating “wouldn’t persist if then in the second round Fillon or Macron or whoever wins,” he told Reuters.
Le Pen is currently second favourite to win the presidential race, behind right-winger Francois Fillon.
Guardian Brexit Dashboard: Weak pound stokes inflation as jobs market cools
The latest Guardian Brexit dashboard is out!
Our monthly healthcheck on the UK economy shows that the fall in the pound following the EU referendum is hurting the economy, pushing inflation higher.
The latest retail sales, house prices and trade figures were all disappointing too, although the economy does seem to still be growing steadily (we get new GDP figures tomorrow).
My colleague Katie Allen, who compiles the report explains:
Seven months on from the referendum, the Guardian’s monthly tracker of economic news shows the weaker pound is being felt in the real economy more keenly than ever, as it raises the cost of imports such as energy and food and that gets passed on to consumers as higher prices in the shops.
To gauge the impact of the Brexit vote on a monthly basis, the Guardian has chosen eight economic indicators, along with the value of the pound and the performance of the FTSE.
The dashboard for January shows a worse than expected performance in four of the eight categories. Two were better than expected and unemployment was as expected. Inflation was higher than economists had forecast, hitting its highest level for more than two years in December.
Here’s the full story:
Here’s the key charts:
And here’s Danny Blanchflower and Andrew Sentance, both former Bank of England policymakers, on the numbers.
UK factory optimism hits two-year high
Just in: UK manufacturers are their most upbeat since January 2015, according to the latest Industrial Trends survey from the CBI.
Factories also reported that domestic orders have grown strongly over the last quarter, but export growth has dipped back.
The survey shows that the pound’s tumble is pushing up import prices, but it’s also making UK firms more competitive in the global market.
And a quarter of companies reported that they are worried they can’t hire skilled staff - that’s the highest level since July 1989. Here’s the report.
Record proportion of manufacturers concerned about skilled labour availability. #CBI_ITS #UKmfg https://t.co/OFPQJyY2TW pic.twitter.com/7AOqk9L4lT
— CBI Economics (@CBI_Economics) January 25, 2017
Buoyant January #CBI survey bodes well for #UK #manufacturing at start of 2017; but prices a worry https://t.co/VJPV8UzQTq via @CBItweets
— Howard Archer (@HowardArcherUK) January 25, 2017
Optimism over Donald Trump’s spending plans are expected to push shares higher on Wall Street later today.
The futures markets shows the S&P 500 and the Nasdaq rising by 0.3%, having hit record highs on Tuesday.
Relief that the supreme court’s Brexit ruling is out of the way is pushing the pound towards $1.26, says Joshua Mahony, Market Analyst at IG.
Despite yesterday’s court decision, markets continue to enjoy a degree of clarity over the UK’s path that has not been seen since June’s referendum result.
With Citibank and Credit Suisse the latest banks to voice their plans to move jobs out of London, it is clear that Theresa May needs to have a robust and dramatic jobs strategy if we are going to see the UK maintain growth over the coming years.
Updated
Sterling hits six week high
The UK pound is having a good morning, rising 0.5% to hit a six-week high of $1.2598 against the dollar.
This recovers yesterday’s losses, which came after the supreme court’s Brexit ruling.
Traders are now watching to see what legislation the government brings to trigger the exit process from the EU.
Rebellious Conservative MPs are now pushing for a full debate on the Brexit plan, and are concerned about Britain’s likely exit from the single market and the customs union. So the pound is likely to remain volatile.
Marc Ostwald of ADM Investor Services says the length of this Act will be critical:
For all the furore (aka political windbagging) around yesterday’s UK Constitutional Court ruling, the only real question is how “tight” the wording of the Act of Parliament (to trigger Article 50) will be. The trick to stopping opponents tagging on conditions would be to make the Act very short, say as little as one paragraph, which would then make it very difficult to change as the rules state that “amendments must be ruled to be within the scope of the original text”.
It should be emphasized that ‘no one won anything’ with the ruling, it is a simple principle that Parliament has to be consulted, if a proposed statute implies a change to the UK’s basic law - Article 50 clearly fits that principle 100%.
The pound is also up 0.4% against the euro at €1.171, meaning one euro is worth 85.3p.
That will be welcomed by UK holidaymakers, and eurozone firms who export goods into the UK, points out Dublin-based broker Paul Sommerville.
Sterling having a good morning - Euro v Sterling back down towards 85 p ,not too bad for Ire Inc in scheme of things .
— Paul Sommerville (@PaulSommerville) January 25, 2017
Here’s Neil Wilson of ETX Capital on today’s market moves:
There’s something of the Trump bump about all this.
For instance, rising copper prices are a sign that global growth is turning positive off the back of his expected reflationary policies. But another leading indicator, the Baltic Dry Index, has slumped of late, a signal that fears of protectionist policies are very high. It’s a mixed picture for miners and uncertain for sure.
BHP Billiton was up nearly 2% as it looks set to benefit from rising metal prices. Fresnillo edged lower despite reporting record annual silver and gold production, as prices for the two metals slipped.
Shares in UK eateries group Restaurant Group have slumped by 10% this morning, after another disappointing trading update.
The company, which runs Frankie & Benny’s. Garfunkel’s, Brunning & Price, Chiquito and other chains, posted a 3.9% drop in like-for-like sales.
It also predicted a ‘difficult’ trading performance over the next six months, as it tries to shake up its offerings to tempt customers
Restaurant Group also admitted that the slump in the pound will drive up input costs, and said the apprenticeship levy, proposed increases in business rates and higher energy taxes will bring extra cost pressures.
German business confidence falls
Oof!! Confidence among German executives has weakened to a five-month low.
The IFO survey of German business confidence has missed forecasts, falling to 109.8 this month from 111 in December. Economists expected a small rise to 111.3
Clemens Fuest, head of the IFO economic institute, says German firms are happy with the current situation, but less optimistic about the outlook over the next six months.
IFO reality check. Expectations pointing to slower growth ahead, still decent though.
— Frederik Ducrozet (@fwred) January 25, 2017
Spoof humour boosts WH Smiths sales
At times like this, we all need a laugh.
And strong sales of spoof humour books and growing customer numbers at airport shops gave WH Smith reason for cheer in its latest trading update.
A comic revival of Enid Blyton’s Famous Five characters helped to lift like-for-like sales 1% at the retailer over the 21 weeks to 21 January, with Five on Brexit Island and Five Give up the Booze among the best-sellers.
Sales at its network of shops in travel locations such as motorway service stations and airports were up 5%, but down 3% at its shops on UK high streets.
The retailer, which this year celebrates its 225th birthday, said that strong sales of spoof humour books and seasonal stationery were offset by year-on-year sales figures for adult colouring books that were tough to beat, having sold really well over the same period last year.
Chief executive Stephen Clarke sounded a broadly positive note:
“As a result of the performance in travel we expect group profit growth for the year to be slightly ahead of plan.
“While there is some uncertainty in the broader economic environment, we remain confident that the group is well positioned for the year ahead as we continue to focus on profitable growth, cash generation and investing in new opportunities.”
And the verdict from veteran retail analyst Nick Bubb?
“Although the comparisons were tough, the business has come through well. How far the 225th Anniversary celebrations of the company help trade this year remains to be seen, but the City will be relieved by the strong Christmas trading performance.”
Shares were up 7.6% at £15.93 in early trading, making the retailer the biggest riser on the FTE 250 in early trading.
The Mexican Peso has weakened by 0.15% today, to 21.56 peso to the US dollar.
It’s suffering from president Trump’s threat to erect a wall on the US-Mexico border.
Kit Juckes of Societe Generale says:
Trump tweets continue to drive sentiment and the President’s most recent - “Big day planned fort NATIONAL SECURITY tomorrow. Among other things, we will build the wall!” - saw the Mexican peso reverse Monday/Tuesday gains.
Big day planned on NATIONAL SECURITY tomorrow. Among many other things, we will build the wall!
— Donald J. Trump (@realDonaldTrump) January 25, 2017
Updated
German government bond prices are falling this morning, pushing the yield (or interest rate) on bunds to a six-week high.
That shows that investors are moving money out of safe-haven assets and into shares.
Bunds are getting completely ironed out
— Nicola Duke (@NicTrades) January 25, 2017
The pound is holding firm at $1.252 this morning, as the City waits for the government to publish its bill on exiting the European Union.
Nice to see the UK Pound £ hold above US $1.25 and move to 1.168 versus the Euro #GBP #BoE
— Shaun Richards (@notayesmansecon) January 25, 2017
The pan-European Stoxx 600 index has gained almost 1% this morning, putting it on track for its biggest gain of 2017.
Solid earning figures from Santander, which posted a 4% increase in revenue, are helping the mood.
Britain’s FTSE 100 index of blue-chip shares has gained nearly 0.7% this morning, as it gains 48 points to 7199.
Mining group Antofagasta is leading the rally, up over 5%, after reporting a solid production report.
Other miners are also on the up because commodity prices are bouncing ahead, on hopes of a US spending boost from Trump.
Mike Van Dulken of Accendo Markets says this strength in base metals is driving the markets up.
Copper in particular up on restricted supply (BHP Billiton cut guidance; prolonged strikes could make matters worse) and growth/inflation expectations from US infrastructure spending plans as Trump sticks to his campaign hymn sheet.
Aluminium, Iron Ore, Lead and Zinc are all tagging along while Oil holds around $53/55, near the mid-point of a $50-60 range as US production increases challenge OPEC cuts.
Updated
The Trump rally is back on!
Traders have a lot to fret about right now, from Donald Trump’s protectionist threats to Britain’s push towards Brexit.
But today, shares are rising on optimism that the global economy may strengthen this year, as Trump starts to delivers on fiscal stimulus boost he promised during his campaign.
Last night, America’s S&P 500 and Nasdaq indices both hit new record highs, as Trump controversially approved two energy projects.
This pushed shares up on Wall Street, as Art Hogan, chief market strategist at Wunderlich Securities, told CNBC:
“I think the real lift in the market was the second round of executive orders from the White House.
This is very much a Trump-infrastructure rally.”
This has fed through to Asia where most markets rallied, with Japan’s Topix index up 1%.
Good morning from Berlin. The Trump trade is in full swing again. Stocks in Asia joined a global rally on investors’ optimism in econ growth pic.twitter.com/Cv9KggD8HT
— Holger Zschaepitz (@Schuldensuehner) January 25, 2017
There’s a positive start in Europe too, with the main markets gaining ground in early trading.
Donald Trump has alarmed many observers with his early moves as president, with environmentalists aghast that he is reviving the Keystone XL and Dakota Access pipelines.
But in the cold-hearted world of the markets, the ‘Trump rally’ is back on, as Kathleen Brooks of City Index puts it.
US stock markets have showed renewed signs of life this week, and the Nasdaq made a fresh record high on Tuesday as the market toyed with the idea of reigniting the ‘Trump rally’ that we saw in the aftermath of the presidential election last November.
Based on Tuesday’s performance, it looks like the market is happy with the first flourish of Trump’s executive orders.
History suggests that there could be further upside for stocks....
Trump also advanced the Keystone Pipeline project on Tuesday, something that President Obama slapped down. These first steps may not please climate change activists, but, as expected, they suggest that President Trump is ‘business friendly’ and the markets are greeting this with approval. Thus, stocks are in a strong position as we move to the middle of the week.
The agenda: German and UK data
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Here’s what’s coming up today.
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9am GMT: German IFO confidence report for January, showing how optimistic business leaders in the eurozone’s largest economy are this month.
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11am: CBI Industrial trends survey, showing how Britain’s factories are faring
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3.30pm: US crude oil inventory figures
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4pm: Bank of England governor Mark Carney is speaking at a banking conference in Wiesbaden, Germany.
Plus there are financial results from banking group Santander, retailer WH Smiths and the Restaurant Group.
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