Global stocks rally
On Thursday European shares were swept up in a rally that took global stocks to a record after Janet Yellen spurred expectations the Fed won’t rush to end the era of cheap money. European bonds gained while the dollar fell against most major peers.
The MSCI All-Country World Index set an all-time high while European shares headed for their biggest two-day gain in almost three months. Sovereign bonds in the U.K. and France followed gains in Treasuries after Yellen expressed confidence in the U.S. economy and signaled monetary tightening would be gradual. The Bloomberg Dollar Spot Index dropped to the lowest since September while gold climbed.
Yellen’s testimony diverted attention from Donald Trump Jr.’s emails about his meeting with a Russian lawyer, though concern remains that the latest saga in Washington may waylay efforts to reform taxes and boost spending. The Fed chair’s gradualist tone on policy came after signals from central banks around the world that stimulative policies may no longer be needed as the global economy strengthens.
The Stoxx Europe 600 Index climbed 0.5 percent as of 11:34 a.m. in London, building on Wednesday’s 1.5 percent gain. Telecoms and retailers led gains. The MSCI ACWI Index, which includes emerging and developed world markets, rose 0.3 percent to a record high. S&P 500 futures added 0.2 percent. The underlying index advanced Wednesday to just 0.4 percent shy of its closing record. The Dow Jones Industrial Average rose 123 points to a record 21,532.
West Texas Intermediate crude lost 0.3 percent to $45.34 a barrel. It climbed 1 percent the previous session after data showed crude inventories fell 7.56 million barrels last week. Gold added 0.2 percent to $1,222.60 an ounce, a fourth day of gains on expectations rates will stay low.
The yield on U.K. 10-year debt dropped two basis points and that on similar French bonds four basis points.
This article was compiled by BOV Asset Management Limited, a member of the BOV Group. BOV Asset Management,TG Complex, Suite 2, Level 3, Brewery Str., Mriehel BKR 3000. Email: infoassetmanagement@bov.com Internet address: www.bovassetmanagement.com. BOV Asset Management is licensed by the MFSA.