Market update: Stocks continue higher, oil companies have a field day, Boeing at record high

6 Feb

by Mihály Tatár

 

Good Morning!

 

  • Stock markets continued to edge up on Tuesday (SPX +0.47%, Nasdaq +0.74%, DAX +1.71%, Nikkei +0.14%), with the newsflow being very supportive: Further Fed voting members signalled their preference for waiting more before raising rates; the Austrialian central bank suddenly followed and turned dovish; a top level delegation from the US (Lighthizer, Mnuchin) was announced to lead talks on China trade next week – remember, March is the deadline before the next round of tariffs -; and corporate news were quite pleasing as well: Boing unveiled an investment in supersonic business jets, resulting in a 3.5% jump to an all-time high; Google beat revenue forecasts; after another 2% rally, ‘everyone and their pension funds have it ‘ Apple overtook Microsoft to regain the most valuable stock title – this was a psychological development; oil companies had a field day after BP’s profit beat even the most optimistic analyst estimate and the market realized oil majors just generated the highest cash flow in four years, BP +5%). In other asset classes, traders were less sure if world peace was imminent (WTI 53.70 USD – rejected by the important 55 level, Brent 62 USD, note that a really weak Dollar and a huge turn in China’s fortune would be needed for this rally to really sustain, EURUSD 1.14, EURCHF 1.1385, GBPUSD 1.2930 on nothing good coming out from the last-minute Brexit melodrama so far. And giving little excitement for investors, in-recession Italy announced a plan to sell 1.8 billion euros worth of state-owned real estate to decrease debt – this is about as serious as the European army and echoes the worst memories about Greece. One has to wonder when Salvini – whose League keeps rising in the polls – decides he is now strong enough to do something risky.)

 

 

Have a nice day,

Mihály

 

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