The FTSE 100 trades firmer this morning at its best in over a year, within touching distance of the all-time high, boosted by JD Sports Fashion and HSBC, with some of yesterday’s struggling miners clawing back the losses. Gold is firmer towards $2,200 and oil has rallied off a two-week low, to help. In Frankfurt shares are also marginally in the green while the Cac is up 0.5 per cent. It’s a short trading week for most of Europe.
The S&P 500 rallied to a record high yesterday, the Nikkei fell overnight on a softer Japanese yen, which is now very much on intervention watch.
The Easter holiday is upon us. US final GDP readings, UoM consumer sentiment and inflation expectations are due today. Tomorrow, Good Friday, sees the US core PCE index, the Federal Reserve’s preferred measure of inflation. So that could get choppy with volumes thinner than usual. Fed chair Jerome Powell is also due to speak.
With March just about done and the first quarter over, bears have thrown in the towel. Hard landing > soft landing > no landing. The Fed’s preference to tolerate higher inflation and suppress yields to keep the labour market happy has been a positive catalyst for risk. The S&P 500 has risen 10 per cent year to date, the Nasdaq 9 per cent. Japanese, European and Australian equity markets have all struck new all-time highs. Even the FTSE 100, a laggard in so many ways lately, is positive for the year and within a whisker of its record.
Gold and Bitcoin and cocoa have all hit record highs. And yet the dollar is also much stronger this year. Everything is up – print enough and that is what you get. Little wonder people are really starting to fret about the sustainability of debt in the US.
The Trader will return on Tuesday 2 April. Happy Easter!
The Trader is written by Neil Wilson, chief market analyst at Finalto
