STOCKS CLIMB AS TRUMP FEARS EASE
Asian and European markets pushed higher yesterday, tracking a record close on Wall Street as investor concerns eased over Donald Trump’s lack of domestic policies. After a slack start to the year for global equities, US traders took up the reins Tuesday to press back on with the November-December Trump rally after the tycoon gave the green light to two big oil pipeline deals.
“Following on from a late rally in the US last night, thanks to the second round of Trump executive orders, the markets looked a lot perkier,” said Spreadex analyst Connor Campbell. The new president signed off on the controversial Keystone XL pipeline-which would carry oil from Canadian tar sands to US Gulf Coast refineries and another crossing in North Dakota.
The move reverses decisions taken recently by Barack Obama and is the latest effort to wipe out the former president’s legacy. The announcement weighed on oil prices on fears it will add to a global glut of crude, despite the OPEC exporting cartel’s agreement in November to cut output. Also Tuesday it emerged that House Speaker Paul Ryan signalled support for public works spending, while reports surfaced that Senate Democrats will unveil a $1 trillion infrastructure plan, offering the president their support if he backs it. The developments soothed anxiety on markets that promised economy-firing spending and tax-cutting measures were being put on the back burner by Trump in favor of reviewing global trade deals.
Pound rallies
In Europe yesterday, Frankfurt and Paris stocks won more than 1.0 percent, but London gains were tempered as sterling rebounded to multi-week highs against the euro and dollar. The British pound had slid Tuesday after the UK Supreme Court’s verdict that Britain’s government must win parliament’s approval before launching Brexit negotiations. But sterling recovered lost ground as markets focused on the greater certainty that the ruling delivered.
The court decision “means the uncertainty that has plagued the currency for months is gradually dissipating”, said Campbell, as Prime Minister Theresa May readies legislation to push Brexit through parliament. May had wanted to start the Brexit process-invoking Article 50 of the EU treaty-without a vote in parliament, but she failed to overturn a High Court ruling that said lawmakers must be consulted. In Wall Street action on Tuesday, the S&P 500 and Nasdaq ended at all-time highs, while the Dow got within spitting distance of breaking the 20,000-point barrier for the first time.
In Asia yesterday Hong Kong rose 0.4 percent and Tokyo jumped 1.4 percent as exporters were supported by a weaker yen.