World stocks ride to record high, dollar retreats

News Hour:

World stocks hit an all time high on Thursday as the latest round of robust global data matched hopes that major economies like the United States will soon be serving up large helpings of fiscal stimulus.

MSCI’s All Country World index, which spans 46 countries, notched the milestone as Wall Street hit its latest record and Asia and Europe consolidated the roughly 10 percent gains both have made since mid-December.

There were surges in exports from Indonesia and Taiwan, falls in unemployment in Europe from Sweden to the Netherlands while stronger U.S. retail sales and inflation data on Wednesday came as Donald Trump again promised mass tax cuts , reports Reuters.

“With the exception of politics, I have rarely seen such as network of positive signals,” said ABN Amro’s chief investment officer Didier Duret.

“There is a momentum, we don’t know when it will stop, but at the moment it is strong,” he said. “Investors are rather underinvested anyway and there is lots of cash so equities are the asset class of default in this environment.”

Another reason for the upbeat mood has been that, unlike in recent years, the prospect of U.S. interest rate rises – which tend to set the bar for global borrowing costs – does not seem to be spooking markets.

The dollar is still down for the year despite a strong run over the last couple of weeks, while Treasury yields, have barely risen, which has helped propel emerging market bonds, stocks and many currencies higher.

The dollar hit the brakes again on Thursday as the glow of the previous day’s upbeat data faded. U.S. government bond yields eased too, taking German Bunds and Europe’s other benchmarks with them. [GVD/EUR]

Upcoming elections in the Netherlands, France, Germany and possibly Italy, have kept investors interested in “safe” government bonds particularly with anti-euro and anti-EU sentiment on the increase throughout the continent.

Markets will also get a better idea later of how much of an impact the recent rebound in euro zone inflation has had on the thinking at the European Central Bank when it publishes the minutes of its January meeting.

“The ECB minutes should provide more minutes on the extent of any hawkish dissent (to its stimulus program),” Mizuho analysts said in a note.

In commodity markets, which have also been enjoying a strong year so far, oil prices recovered from a knock from data showing record high U.S. crude and gasoline inventories.

Brent and U.S. crude both inched up 0.3 percent to $55.92 and $53.28 a barrel respectively, while gold prices also rose as the dollar drifted down.

Industrial bellwether copper, which has surged 30 percent since late October, eased however to $6,028 a tonne after China’s overseas investment weakened. China is the world’s top copper user, but prices were supported by the prospect of supply disruptions in Chile and Indonesia.

The mildly weaker metals prices meant European shares couldn’t quite hold their ground either despite the sentiment boost from the new record high in global stocks.

Md. Rafiuzzaman Sifat, a CSE graduate turned into journalist, works at News Hour as a staff reporter. He has many years of experience in featured writing in different Bangladeshi newspapers. He is an active blogger, story writer and social network activist. He published a book named 'Se Amar Gopon' inEkushe boi mela Dhaka 2016. Sifat got a BSc. from Ahsanullah University of Science & Technology, Bangladesh. He also works as an Engineer at Bangla Trac Communications Ltd. As an avid traveler and a gourmet food aficionado, he is active in publishing restaurant reviews and cutting-edge articles about culinary culture.
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