Fresh record for Dow at weekend dominated by CBs
NEW YORK: The Dow edged to a fresh record Friday, extending a rally on a mixed day for global equities after this week’s central bank announcements.
NEW YORK: Traders work on the floor of the New York Stock Exchange (NYSE) during morning trading on December 14, 2023, in New York City. – AFP.
The blue-chip US index, which topped 37,000 for the first time this week, added 0.2 percent to finish at 37,305.16, a third straight record. For the seventh straight time, all three indices in New York scored weekly gains. “Selling efforts had been driven by a lingering sense that stocks are overbought on a short-term basis,” said Briefing.com. “Still, selling was modest considering the scope of recent gains.”
Markets largely shrugged off comments from New York Federal Reserve President John Williams that downplayed talk of imminent interest rate cuts. Europe diverged amid news of slumping eurozone business activity. Frankfurt ended flat while Paris rounded out the week slightly ahead for a record close but London lost one percent.
Markets faced a busy week for global interest rates after the US Federal Reserve pivoted Wednesday to signal it would cut next year. Both the Bank of England and the European Central Bank distanced themselves on Thursday from cutting any time soon.
“The ECB and the BoE refused to join the Fed-thrown pivot party,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank. “Both (ECB president) Christine Lagarde and (BoE governor) Andrew Bailey declined to discuss cutting interest rates, judging a policy loosening too early as the inflation threat looms,” she added, noting also that Norway had sprung a surprise rate hike.
“As a result, the rally in global stock and bond markets slowed.” Nevertheless the Fed’s pivot, which was more dovish than expected, has set up equities for a Santa rally, with a string of data suggesting inflation in the world’s top economy was being tamed while avoiding recession.
Now the debate turns to the timing of the first rate cut and how many there will be. Some experts have suggested there could be more than the three envisaged in the Fed’s “dot plot.” JPMorgan economists see five. Asian indices were also buoyed by news that China had injected more cash than expected into the financial system. Hong Kong led the advances, surging more than two percent. Tokyo rebounded from the previous day’s loss as the yen’s rally against the dollar faded, but Shanghai gave up early gains to end down.
Dealers are now keenly awaiting the Bank of Japan’s policy decision next week after boss Kazuo Ueda suggested officials could soon move away from their ultra-loose policy. - AFP.
