New all-time highs for US and Europe

Going into the last part of the trading day the FTSE 100 is positive, up around 25 points at 6718.

European markets

It has been yet another positive session for European markets, with the German DAX hitting fresh all-time highs. The FTSE 100 has had a more cautious start, but found its feet as the morning went on and soared through the 6700 level. However, the UK blue-chip index is still lagging behind some of its continental and US equivalents. The FTSE is still around 1.5% below the May highs, whereas the S&P 500 and DAX are 7% above their equivalent levels. The relative underperformances by the mining sector and financials have caused some drag for the FTSE in recent months, but if US strength continues it can surely only be a matter of time before the UK index sets fresh highs for the year.

US markets

Another day, another all-time high for the Dow Jones. The opening on Wall Street saw the Dow push through the 16,000 level, giving a year-to-date performance of 22%. These are impressive gains by any normal measure, and it can be tempting to feel that a top cannot be too far away. Many fingers have been burnt this year trying to predict that major turning point. But for now at least, with an accommodative central bank, it appears that investors are more afraid of missing out on gains than of losing in any immediate downturn. Some would see this sort of psychology as warning enough that the enthusiasm is starting to get out of hand.

FX

The US dollar has been under some pressure again today, ahead of this week’s Federal Reserve meeting. From the performance of stock markets, it is clear that investors have a risk-on attitude across the board at the moment. This has helped the likes of the euro and pound hit their best levels for a few weeks.

Commodities

As investors embraced risk again today, it wasn’t surprising to see gold weaken, even relative to the US dollar. There continues to be little appetite for holding the metal, in the short term at least, with rallies proving only to be sustainable for brief periods. Conversely, oil is still finding some buyers in the low $90 a barrel region. Traders are taking the view that the recent correction from above $110 may have been overdone, and if there are continued signs of ongoing economic recovery this may well prove to be a floor.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Find articles by analysts

This information has been prepared by IG, a trading name of IG Markets Limited and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. International accounts are offered by IG Markets Limited in the UK (FCA Number 195355), a juristic representative of IG Markets South Africa Limited (FSP No 41393). South African residents are required to obtain the necessary tax clearance certificates in line with their foreign investment allowance and may not use credit or debit cards to fund their international account.