November 29, 2017 / 8:40 AM / a year ago

Daily Briefing: On a roll

LONDON (Reuters) - Global stock markets have surged anew over the past 24 hours, with MSCI’s all-country world index setting new records again on Wednesday in the slipstream of all four major Wall Street indices notching up new highs late on Tuesday.

Hudson Maloney, son to specialist trader Gregg Maloney, plays on the trading floor during a traditional bring-your-kids-to-work day at the New York Stock Exchange (NYSE) in New York, U.S., November 24, 2017. REUTERS/Brendan McDermid

The latest wave higher is due to a whole constellation of issues, from a steady diet of positive U.S. and European economic surprises to expectations of a breakthrough on the proposed U.S. tax cut bill as soon as tomorrow.

The latest eye-catching stat was U.S. consumer confidence hitting a 17-year high this month. But the main market driver on Tuesday was U.S. financial stocks, who took heart from incoming Federal Reserve chair Jerome Powell’s nomination hearing after he indicated a lighter approach to financial regulation and possible review of post-crisis measures such the Volcker rule limiting banks’ proprietary trading operations.

The surge, which marked the biggest one-day gain in the S&P500, was all the more remarkable against the backdrop of North Korea’s latest missile test and angst over another U.S. debt ceiling deadline next month. The North Korea test, the latest in a line of such incidents this year that have proved only fleeting negatives for world markets, was even batted away by South Korea’s flat Kospi bluechip index.

The MSCI World, meantime, is now within a whisker of 20 percent year-to-date gains and close to surpassing 2013’s full-year advance of 20.25 percent. Above there would make it the best year since 31 percent post-crash bounce of 2009. Of course all that pales in comparison to the ballistic rise of bitcoin, which topped the $10,000 milestone overnight to clock a tenfold increase so far in 2017 and is now swinging up to $1000 a day in price with no obvious underlying day-to-day drivers.

The backdrop is speculative buying ahead of the CME’s launch of a bitcoin futures contract next month and amid some relief that a recent planned software upgrade that could split the currency was abandoned.

Elsewhere sterling has rallied to its highest since late September against the dollar after news reports late Tuesday that Britain and European Union had agreed the outlines of a Brexit settlement bill of anywhere between 45 billion and 55 billion euros, depending on the report. The U.S. dollar index, U.S. Treasury yields and oil prices were all a touch weaker, with energy traders watching the build-up to Thursday’s OPEC meeting.


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Editing by Toby Chopra

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