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World stocks zoom to five-week highs on economic, stimulus hopes

World stocks zoom to five-week highs on economic, stimulus hopes

(Reuters) – Global stocks scaled five-week highs Monday on hopes that more government stimulus would come and that the world economy was on the mend, while the Chinese yuan retreated from a 17-month high after a policy move over the weekend. Investor optimism that Washington will work through talks that have repeatedly stalled to deliver another round of fiscal stimulus drove major U.S. stock indices to highs last seen in early September. Hopes that the top Wall Street banks will announce a decent set of third-quarter earnings this week that show business was not as weak as feared also helped, while excitement over an expected debut of Apple Inc’s latest iPhone on Tuesday buoyed technology stocks. Slugged by stronger investor demand for risk, the U.S. dollar was pinned near a three-week low and gold, another safe-haven asset, stayed below a three-week high. The U.S. bond market is closed on Monday for Columbus Day. The cheer over the economic outlook and government stimulus did not boost oil prices, which dropped as investors focused on a boost in supply. The S&P 500 jumped 57 points, or 1.64%, to 3,534.22, within spitting distance of its record high of 3,580.84 struck on Sept. 2. The Dow Jones Industrial Average climbed 250 points, or 0.88%, to 28,837.52.

Shares in Apple surged 6.4% while those in Amazon rallied 4.8% ahead of its Prime Day shopping event on Oct. 13 and 14. That helped the Nasdaq Composite to stage its biggest one-day rally in a month, jumping 296 points, or 2.56%, to 11,876.26.

“The market leaders are once again the tech names, supported by the fact that the economy continues to expand,” said Phil Blancato, chief executive of Ladenburg Thalmann Asset Management in New York. MSCI’s gauge of stocks across the globe climbed 1.43% to 592.96, a

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World stocks zoom to 5-week highs on economic, stimulus hopes

World stocks zoom to 5-week highs on economic, stimulus hopes

By Koh Gui Qing

Oct 12 (Reuters)Global stocks scaled five-week highs on Monday on hopes that more government stimulus was coming and the world economy was on the mend, while the Chinese yuan retreated from a 17-month high after a policy move over the weekend.

Investor optimism that Washington will work through talks that have repeatedly stalled to deliver another round of fiscal stimulus drove major U.S. stock indices to highs last seen in early September.

Hopes that the top Wall Street banks will announce a decent set of third-quarter earnings this week that show business activity was not as weak as feared also helped.

Slugged by stronger investor demand for risk, the U.S. dollar was pinned near a three-week low and gold, another safe-haven asset, stayed below a three-week high. The U.S. bond market is closed on Monday for Columbus Day.

The cheer over the economic outlook and government stimulus did not boost oil prices, which dropped as investors focused on a boost in supply.

The S&P 500 .SPX jumped by 65 points, or 1.89%, to 3,542.51, while the Dow Jones Industrial Average .DJI rose 316 points, or 1.11%, to 28,902.52. The Nasdaq Composite .IXIC leapt 336 points, or 2.89%, to 11,916.49. All three indices touched highs not seen since Sept. 2.

Edward Moya, a senior market analyst at OANDA, a currency broker, said investors were shrugging off the uncertainty of U.S. stimulus negotiations and hoping instead that banks will not disappoint in their earnings.

A special event organized by Apple Inc AAPL.O on Tuesday also stoked speculation that the tech giant is set to unveil a new iPhone with 5G capabilities, boosting tech stocks across the board.

“There’s optimism that banks are going to post positive results,” Moya said. “If the consumer is not as

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Stocks Rise on Hopes of a U.S. Economic Relief Deal: Live Updates

Stocks Rise on Hopes of a U.S. Economic Relief Deal: Live Updates

Here’s what you need to know:

  • European stocks rose on Monday and Wall Street futures pointed to a rise in the S&P 500 when trading starts later in the day, following Asian stocks higher.

  • The Stoxx Europe 600 rose 0.5 percent, and the benchmark stock indexes in France and Germany each climbed less than half a percent. Shares in China and Hong Kong rose following the holiday week in China and expectations that President Xi Jinping would announce later this week more investment for technology in Shenzhen and increase the city’s links to Hong Kong.

  • U.S. stocks gained last week on hopes that Congress and the Treasury Department would agree to a broad economic relief package. But on Saturday, Senate Republicans balked at the cost of another deal, while Democrats, led by Speaker Nancy Pelosi, said the package did not go far enough. On Sunday, the White House suggested an agreement could still be reached before the election. In the meantime, traders will also get more updates on how individual companies are weathering the fallout from the coronavirus pandemic as third-quarter earnings seasons begins.

  • After a rally last week, oil prices declined on Monday as stalled production restarted in Norway and Libya. U.S. bond markets are closed for Columbus Day, a federal holiday that is recognized in some parts of the country as Indigenous Peoples’ Day.

  • Shares in the airline group IAG fell 1.6 percent after a sudden management shake up, in which the chief executive of British Airways will be replaced by the head of Aer Lingus.

Credit…Jeremy M. Lange for The New York Times

Millions

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Market Regains Footing On Hopes Of More Stimulus

Market Regains Footing On Hopes Of More Stimulus

Market Regains Its Footing

“Live by the sword, die by the sword.” – Matthew 26, 26:52

Such was the lesson quickly retaught to President Trump when we decided to halt stimulus talks on Tuesday, sending the market careening into the red. By Wednesday, Trump quickly reversed and has been talking up more stimulus all week.

The inherent problem of tying your Presidency to the stock market is that it’s all fine until it isn’t. The market crash in December of 2018, and again in March 2020, should have been a wakeup call. Unfortunately, it wasn’t, and now valuations, deviations for long-term means, and speculation have increased risk significantly.

Also, while more stimulus may be a great short-term “fix” for the economy, and ultimately the market when the Federal Reserve monetized the debt issuance, as discussed in this week’s #MacroView:

“More debt doesn’t lead to stronger rates of economic growth or prosperity. Since 1980, the overall increase in debt has surged to levels that currently usurp the entirety of economic growth. With economic growth rates now at the lowest levels on record, the change in debt continues to divert more tax dollars away from productive investments into the service of debt and social welfare.”

Nonetheless, the market rallied on what is for now “hope” of more stimulus. There is still no deal on Capitol Hill, and the parties are still far apart primarily on funding for states and municipalities.

Market Regains Its Footing

As I penned last week, we were expecting a rally this week.

“Notably, while the rally that we have witnessed from the recent lows has eaten up a fair bit of the previous oversold condition, the MACD “buy signal” was triggered on Friday. Such suggests that we could see some additional buying next week.”

The market did indeed

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Merger And Acquisition Activity, Stimulus Hopes, Higher Yields

Merger And Acquisition Activity, Stimulus Hopes, Higher Yields

Key Takeaways:

  • Volatility ebbing after spike earlier in the week
  • Aid for struggling airlines a top focus in ongoing stimulus talks
  • AMD reportedly in talks to buy rival chipmaker Xilinx
    XLNX

An election with far-reaching policy implications—one way or the other—is less than a month away. Big banks are set to kick off what could be a challenging earnings season. Fresh outbreaks of Covid-19 have been reported here and abroad. And a Category 3 hurricane—the 25th named storm this season—is about to make landfall in the U.S.

And yet, the S&P 500 Index (SPX) and other indices find themselves within striking distance of all-time highs as a rally enters its third day early Friday. The Dow Jones Transportation Average ($DJT) has actually made new all-time highs. After touching 30 earlier in the week, the Cboe Volatility Index (VIX) has fallen 13% and starts the day with a 25-handle. Merger and acquisition (M&A) activity has picked up in earnest this week (see more below). And Treasury yields have been inching toward normalcy, and could be poised for a breakout to the upside.

If 2020 has taught us one thing, it’s that markets have the power to surprise, if not confound, even the most seasoned investor. That’s important to remember as we enter the election home stretch and prepare for the often-notable Q3 earnings season.

Is this a rally that’s got some legs? Or is it more like a market without much conviction, but one where few people want to get in the way of the upward momentum? We saw on Tuesday how things can turn back on a dime, but the quick recovery that started Wednesday and has carried through until Friday morning might hint that anyone trying to go short here faces a challenge.

If the

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