By IFCMarkets
US stocks hit fresh record highs on Thursday as Donald Trump promised to make a major tax announcement in a few weeks. White House met with airline industry executives where said that lowering the overall tax burden on US business was essential. The benchmark S&P 500 index advanced 7.9% since the November elections in US in anticipation of expansionary policy. The rally has become subdued recently as investors awaited the details on proclaimed policies. Financials added 1.4% on Thursday after three days of losses as bond yields rose while energy shares rose 0.9%. US dollar index, a measure of a greenback’s value against a basket of six major currencies, has added more than 5% in six weeks after the Trump’s election but then have back some of its profits on concerns over the trade and immigration policies. It gained 0.4% to 100.64 on Thursday. S&P 500 index added 0.58% to 2,307.87. Dow Jones industrial average advanced 0.59% to 20,172.4 and Nasdaq composite rose 0.58% to 5,715.18. All three indices closed at all-time highs. The worst-performing was the utilities sector which lost 0.8%. About 70% of S&P 500 components have reported their quarterly earnings so far, the results being better than expected. The stocks of Viacom, Kellogg, Prudential advanced on positive earnings data. On the other hand, Coca-Cola lost 1.8%, Twitter fell 12.3% and Intel slid 2.5%.
Asian stocks reached their 18-month high on Friday on upbeat Chinese economic data and gains of Wall Street after Donald Trump promised a major tax announcement soon. Chinese exports rose 7.9% in January while imports soared 16.7% beating expectations. The data came out positive as China benefits from the global economic pick-up. The Shanghai Composite index added 0.5%. MSCI’s index of Asia-Pacific shares outside Japan rose 0.5% to its record high since July 2015, 1.5% up this week. Japanese Nikkei index advanced 2.5% to 19,378.93 as yen weakened. USDJPY rose 0.4% to 113.75 yen. The Bank of Japan increased its buying in “superlong” bonds on Friday which helped to limit the advance of bond yields for now. The move took the markets by surprise. BOJ introduced the “yield curve policy” control in late September trying to keep the 10-year bond yields around zero percent and to manage the yield curve.
Oil futures prices advanced more than 1% today on the news that oil production of OPEC members has reached the record 92% of the targeted volume in January. Brent crude futures advanced 57 cents to $56.20 a barrel while WTI futures rose 46 cents to $53.46. According to EIA, it the current compliance levels are maintained, the global oil oversupply is to fall by 600,000 barrels a day within the next 6 months.
Gold retreated on Friday from its 3-month high as US president Donald Trump promised a major tax announcement. Spot gold lost 0.5% to $1,224.98 an ounce while US gold futures for April delivery lost $9.80 to $1,227.00.
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