Shares scale record peak on upbeat results, dollar eases
By Herbert Lash NEW YORK (Reuters) - A gauge of global equity markets jumped to an all-time peak on Wednesday, after the S&P 500 and Nasdaq rallied to fresh records on upbeat corporate results, while the dollar eased a day before the Federal Reserve potentially sets a new course on inflation.
By Herbert Lash
NEW YORK (Reuters) - A gauge of global equity markets jumped to an all-time peak on Wednesday, after the S&P 500 and Nasdaq rallied to fresh records on upbeat corporate results, while the dollar eased a day before the Federal Reserve potentially sets a new course on inflation.
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 the company's online business software.
Salesforce, which is slated to join the blue-chip Dow Jones Industrial Average index on Aug. 31, reflects the reality of the world we live in, said JJ Kinahan, chief market strategist at TD Ameritrade in Chicago.
"If you look at the stocks that are actually driving the rally and the companies that everybody is using, it really is a technology-leading society at this point, especially with COVID," Kinahan said.
Adding to the upbeat mood was early data from Moderna's
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, too. Benchmark indexes in Frankfurt <.GDAXI>, Paris <.FCHI> and London <.FTSE> closed up 0.98%, 0.80% and 0.14%, respectively.
The likelihood of a COVID-19 vaccine being introduced in early 2021 combined with very low interest rates and an outlook that 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 0.82% to 583.61, passing its previous record of 581.02.
Europe's broad FTSEurofirst 300 index <.FTEU3> closed up 0.80%, while on Wall Street the Dow Jones Industrial Average <.DJI> rose 0.21%, the S&P 500 <.SPX> gained 0.89% and the Nasdaq Composite <.IXIC> added 1.43%.
Investors are focused on whether Federal Reserve Chairman Jerome Powell will hint at shifting the Fed's inflation target to an average when he addresses the U.S. central bank's policy framework review at the Jackson Hole symposium on Thursday.
Investors are betting that when he speaks, Powell will create expectations of more inflation, said Jim Vogel, interest rate strategist for FHN Financial.
The dollar index, which tracks the greenback's value against a basket of currencies <=USD> fell 0.053%.
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 10-year U.S. Treasury
Euro zone bonds were flat, with safe-haven Bund yields
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
Gold jumped more than 1% as the dollar slipped. U.S. gold futures
(Reporting by Herbert Lash, additional reporting by Ross Kerber in Boston; Editing by Tom Brown)
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By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.