World stocks post longest winning streak of 2018
london — World stocks scored an eighth straight session of gains and their longest winning streak of the year on Thursday, as reassuring trade data from China kept the previous day’s post-US mid-terms risk rally rolling.
Traders were gearing up for the US Federal Reserve meeting in a confident mood and the contrast to the last one in late September, when stock markets had just begun one of their most painful poundings in years, was stark.
European shares hit a one-month high after Asia and Wall Street had set similar milestones overnight, as solid results from SocGen, Commerzbank and caterer Sodexho soothed concerns about slowing corporate earnings.
S&P 500, Dow and Nasdaq futures pointed to Wall Street giving back a bit of ground later, but the dollar, bond yields and MSCI’s world stocks index were all holding their gains.
The US currency pulled slowly away from two-and-a-half week lows hit after Donald Trump’s loss of the House of Representatives in Tuesday’s mid-term elections reduced the chance of another blizzard of tax cuts.
That in turn made analysts and money managers more optimistic that the US economy wouldn’t ultimately overheat and force the Fed to keep jacking up borrowing costs.
“We think we are close to the end of the appreciation of the dollar,” said fund manager Amundi’s Didier Borowski, who expects the Fed to pause its hiking cycle next year as the economy starts to slow.
“Usually we see a year-end rally [in stocks],” he added.
That rally may in fact be arriving early. Hong Kong’s Hang Seng advanced 0.9 per cent and the Shanghai Composite Index climbed 0.2 per cent overnight, receiving a mild lift from stronger-than-expected October Chinese exports data.
With shippers rushing to get their goods into the United States before higher trade tariffs kick in next year, exports rose 15.6 per cent from a year earlier, smashing forecasts for a modest slowdown to 11 percent.
Australian stocks, which tend to move with China’s fortunes, rose 0.5 per cent, South Korea’s Kospi added 1.3 per cent and Japan’s Nikkei surged 1.8 per cent, almost matching Wednesday’s 2 per cent Wall Street leap.