Global equity markets edged higher on Thursday, with the S&P 500 hitting an all-time high, as US and German data drove confidence on economic growth and helped extend a stock rally.
Data on German private-sector growth reassured investors about the outlook for Europe’s biggest economy following a soft patch, while a batch of US reports showed economic strength early in the third quarter.
Markit’s flash composite Purchasing Managers’ Index for Germany was 54.9 for August, well above the 50 mark that indicates economic expansion, a relief after German GDP data last week showed a surprise contraction in the second quarter.
In the United States, home resales rose to a 10-month high in July, factory activity in the mid-Atlantic region hit its highest level since March 2011 in August, and a gauge of future economic activity grew solidly last month.
The benchmark S&P 500 rose as high as 1,992.65 points, topping the prior record of 1,991.39 set in late July, and European markets extended earlier gains.
MSCI’s measure of global equity performance also rose, but its measure of emerging markets slipped a bit.
“It seems that conditions reflect the best of all worlds – US economic growth that is neither too slow, which would put pressure on earnings, nor too fast,” said Terry Sandven, chief equity strategist at US Bank Wealth Management in Minneapolis.
The Dow Jones industrial average rose 71.54 points, or 0.42 per cent, to 17,050.67. The S&P 500 gained 4.93 points, or 0.25 per cent, to 1,991.44 and the Nasdaq Composite was flat, down 0.13 points, or -0 per cent, to 4,526.35.
In Europe, the FTSEurofirst 300 index of top regional shares rose 0.67 per cent to close at 1,355.09 points.
While stocks might be a tad pricey, earnings growth will continue to support US equities, said Bernie Williams, chief investment officer of investment solutions at USAA Investments in San Antonio, Texas.
“Right now the latest consensus is eight or nine per cent earnings growth, I think that’s what propels the market going forward,” Williams said.
The German data helped the euro rebound against the dollar, rising 0.17 per cent to $1.3281. Against the yen, the dollar gained 0.11 per cent to 103.84 yen.
US Treasuries hewed to a tight range, showing little reaction to the stronger-than-expected US economic data. Investors awaited developments from the annual meeting of central bankers in Jackson Hole, Wyoming, which began late yesterday.
A speech today by Federal Reserve Chair Janet Yellen, when she is expected talk about labour markets, is highly anticipated by investors.
Benchmark 10-year US Treasuries rose 2/32 in price to yield 2.4193 per cent.
US crude rose and Brent futures pared losses, lifted by the US economic data after a plentiful supply picture. Brent crude for October rose 25 cents to $102.53 a barrel, while US crude rose 89 cents to $94.34 a barrel.