US markets rally to new highs

Heading into the close the FTSE 100 continues to build on gains above 6600, while US indices discover new highs once more.

NYSE trading floor
Source: Bloomberg

Company earnings lift FTSE

Oil firms and associated companies are once again populating the bottom of the FTSE 100’s scoreboard as Brent drops below $80 for the first time in over four years.

A hefty day of UK earnings means that the broader index is still posting good gains, helped along by the likes of ITV and the LSE, rising after decent figures this morning.

Hopes of Chinese stimulus following underwhelming data this morning look a bit far-fetched, but with a paucity of real data it looks like the market is pleased to believe in the idea for the time being.

US indices continue to provide strength from which the UK and Europe can draw to gain further ground, although the DAX’s drop below 9300 will have a few traders fretting that divergences between the economies of the eurozone and the US will continue to make themselves felt. Even so, a few calming words from Mario Draghi could easily allow Europe to make up the gap, as we continue to await an early Christmas present from the ECB.

US markets' rally keeps on going

Warren Buffett was in the news again with his purchase of Duracell from Procter & Gamble, but it certainly seems that US indices have acquired the traits of the iconic Duracell bunny, as their rally keeps on running. This market has come an awfully long way in a short time, but if even the Sage of Omaha is still buying after a 10%+ move there must be some more juice in the tank.

Overall news flow is fairly light, although job openings were of a suitably encouraging tone, as was data that showed quits among US workers hit their highest level since April 2008. Contrast that with eurozone data that refuses to get better, and it becomes even more obvious why US indices have outpaced their cousins in the Old World in this recent surge.

Gold and silver find buyers

There has been a modicum of buying in gold and silver this afternoon, but not enough to shake the precious metals out of their tight trading ranges. Even NATO’s comments on Russian movements in Ukraine yesterday couldn’t shake traders from their slumber, and more good US data today meant that the dollar was once again the trade of choice. However, crude prices are enduring another hefty move lower, with Brent shifting below $80 for the first time since late 2010. With this key level out of the way a move towards $75 now looks likely as the hunt for a real floor in oil prices goes on.

Euro makes gains against pound

Yesterday’s dovish inflation report from Mark Carney and his team in London has continued to give the euro a lift against the pound. Suddenly the difference between the two central banks doesn’t look so wide, as Threadneedle Street adjusts to the lack of inflation imported to the UK economy by the widening stagnation of the eurozone. Set against these two institutions, the Federal Reserve looks positively hawkish and this will lead to a further round of dollar buying.

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