Global shares hit record peak on upbeat results, dollar eases

By Herbert Lash NEW YORK (Reuters) - A gauge of global equity markets hit an all-time peak on Wednesday, after the S&P 500 and Nasdaq indexes set fresh records on upbeat corporate results, while the dollar eased ahead of a highly anticipated speech by Federal Reserve Chairman Jerome Powell. MSCI's all-country world index surged past a pre-COVID high reached in February as investors drove up technology stocks after Salesforce.com Inc raised its annual revenue forecast on surging demand for its online business software

Reuters August 27, 2020 00:05:34 IST
Global shares hit record peak on upbeat results, dollar eases

Global shares hit record peak on upbeat results dollar eases

By Herbert Lash

NEW YORK (Reuters) - A gauge of global equity markets hit an all-time peak on Wednesday, after the S&P 500 and Nasdaq indexes set fresh records on upbeat corporate results, while the dollar eased ahead of a highly anticipated speech by Federal Reserve Chairman Jerome Powell.

MSCI's all-country world index surged past a pre-COVID high reached in February as investors drove up technology stocks after Salesforce.com Inc raised its annual revenue forecast on surging demand for its online business software.

Adding to the upbeat mood was early data from Moderna's experimental COVID-19 vaccine which showed it induced immune responses in older adults that were similar to those for younger participants.

Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn

Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh

The S&P 500 and the Nasdaq have hit daily record closing highs since Friday, driven by demand for tech-focused stocks, government stimulus and record low interest rates.

Better-than-expected economic data in Europe has lifted analysts expectations for earnings, driving regional bourses higher. Benchmark indexes in Frankfurt <.GDAXI>, Paris <.FCHI> and London <.FTSE> closed up 0.98%, 0.66% and 0.14%, respectively.

The likelihood of a COVID-19 vaccine being introduced in early 2021 combined with very low interest rates and the likelihood rates stay low for longer are driving equities higher, said Sam Stovall, chief investment strategist at CFRA in New York.

"Until we really start to see a worry that interest rates are likely to start to move higher, I still see growth in general, tech and consumer discretionary in particular, holding up very well," he said.

The MSCI index <.MIWD00000PUS>, a gauge of equity performance in 49 countries, rose 0.56% to 582.11, passing its previous record of 581.02, while Europe's broad FTSEurofirst 300 index <.FTEU3> added 0.80% to 1,446.47.

On Wall Street, the Dow Jones Industrial Average <.DJI> fell 0.05%, the S&P 500 <.SPX> gained 0.50% and the Nasdaq Composite <.IXIC> added 1.14%.

Salesforce.com , which is set to enter the blue-chip Dow index <.DJI> next week, jumped 25.1%.

Investors are betting that when he speaks on Thursday, Powell will create expectations of more inflation, said Jim Vogel, interest rate strategist for FHN Financial.

Powell is scheduled to address the Fed's policy framework review and investors are focused on whether he will hint at shifting the U.S. central bank's inflation target to an average.

The dollar index, which tracks the greenback's value against a basket of currencies fell 0.056%.

Earlier the index hit a session high of 93.37 after data showed that U.S. durable goods orders increased more than expected in July.

The euro fell 0.08% to $1.1824.

The 10-year U.S. Treasury note rose 2.8 basis points to 0.7096%.

Euro zone bonds were flat, with safe-haven Bund yields rising a smidgeon after enduring on Tuesday their biggest daily losses since May as better German economic data and trade dented hunger for government debt.

Oil prices traded little changed, pressured by worries about the demand outlook during the coronavirus pandemic but buoyed as U.S. producers shut output in the Gulf of Mexico ahead of Hurricane Laura.

Producers evacuated 310 offshore facilities and shut 1.56 million barrels per day of crude output, 84% of Gulf of Mexico's offshore production - near the 90% outage that Hurricane Katrina brought 15 years ago.

Brent crude futures fell $0.13 to $45.73 a barrel. U.S. crude futures gained $0.03, to $43.38 a barrel.

(Reporting by Tom Wilson; Editing by Bernadette Baum)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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