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Google seems to be the major beneficiary of US traders’ renewed equity focus, having posted strong third-quarter figures. In after-hours trading the shares hit an all-time high of $960, moving the company above Microsoft to become the second largest company in the NASDAQ. Moves like this will help traders back into a risk-on mindset after the US shutdown and debt ceiling issues.
Although the US dollar has continued to weaken today, it has done so at a considerably slower pace than yesterday. The likelihood of the US Federal Reserve beginning the process of tapering its quantitative easing policy now, following the disruption and cost of the last couple of weeks, is minimal. This of course means that the devaluing of the US dollar and the propping up of equity markets will continue at pace.
The week looks likely to end on a broadly positive note, and looking forward to next week we could expect more of the same. The only word of caution should be that we are expecting a raft of late US economic data to be released next week, and, while arguably its effect has already been undermined, there still might be one or two surprises.