Stocks on Wall Street rose to fresh record highs yesterday, with Financials leading indices higher following testimony by Jerome Powell – President Trump’s Fed Chair nominee – before the Senate banking committee. Mr Powell set the stage for further rate rises and said the existing rules on banks were “tough enough” to ensure a stable system.
The S&P 500 gained 1% for the session. Financials were the biggest gainer, rising 2.6%, while Industrials and Consumer stocks also put in a strong session. News of a ballistic missile launch by North Korea failed to arrest the move higher in US equities.
Oil prices fell 0.4% amid uncertainty on whether Saudi Arabia and Russia will agree to extend production cuts following the recent recovery in the underlying commodity since the cuts were initiated.
European equities also participated in the pro-risk session, gaining between 0.5% and 1.0%. The Euro Stoxx 50 index gained 0.5%, the German DAX index rose 0.5%, the French CAC gained 0.6% and the Spanish IBEX closed 0.8% higher.
Global mining stocks came under pressure on growing concerns on demand from China. President Xi has said that he wants to cut back on inefficient metals production for environmental reasons.
London’s FTSE 100 rose 1% despite the week session for mining stocks. The index benefited from a rally for Royal Dutch Shell after well-received earnings and a rally for banks after reassuring results in the Bank of England’s stress tests of the sector.
Asian equities traded higher this morning despite the news of a ballistic missile launch from North Korea. Japanese stocks rose 0.5%, with Financials and Consumer Discretionary among the sessions biggest gainers, while Chinese equities closed marginally higher.