13 September, 2017
USA stocks rallied to record highs Monday as Hurricane Irma weakened without causing as much damage as many had feared, and a North Korean holiday passed without new missile launches. "It does appear that the worst-case scenario for Florida has been evaded", said Peter Cardillo, chief market economist at First Standard Financial in NY.
LAGGARDS: Home improvement retailers fell. Their stocks had climbed recently as investors expected post-storm repairs to boost their business.
Tensions between the US and North Korea have been on investors' minds recently.
Global investors were also relieved after a North Korean national holiday passed without any other actions that would raise tensions between that country and the U.S. Bond prices fell, sending yields higher.
Sterling fared better against the euro, brushing a fresh one-month high of 90.83 pence, aided by speculation that the Bank of England may sound more hawkish on interest rates in defence of the currency at its policy meeting on Thursday.
"This is what happens when the market sells off in the face of what is really an awfully good fundamental environment", said Jim Paulsen, chief investment strategist for the Leuthold Group.
Meanwhile, Federal Reserve speakers are now in a blackout period before next week's policy meeting, so investors are likely to devote much of their attention to assessing the impact of natural disasters on USA growth.
And while a gridlocked federal government hasn't done much to stimulate the economy, Paulsen said the weakening dollar and falling interest rates could give US businesses, especially technology companies, a big boost.
MSCI's all country world stock index, which tracks more than 2,400 stocks in 47 countries, hit its latest peak as Europe's insurers rose more than 2 percent on hopes Irma's damage would not prove as costly as feared.
The Dow Jones Industrial Average rose 65.07 points, or 0.29 percent, to 22,122.44.
The sense of relief was enough to lift E-Mini futures for the S&P 500 by 0.3 per cent, while yields on 10-year Treasury notes rose 3 basis points to 2.09 per cent. The Russell 2000 index of smaller-company stocks added 15.40 points, or 1.1 percent, to 1,414.83.
Irma weakened shortly before it came ashore Sunday. Still, nearly 7 million were without power and millions were displaced in what may go down as one of the worst storms in Florida's history. While the damage is still being assessed, insurers climbed Monday as investors anticipate they won't have to pay out as much in claims as it looked like they would just a few days ago.
Shares of Florida insurers Heritage Insurance Holdings Inc HRTG.N, HCI Group Inc and Universal Insurance Holdings Inc all rose at least 13 percent or more. Insurers and travel companies did well in US markets Monday, while home improvement stocks declined on expectations of less business from storm repairs. Royal Caribbean Cruises jumped $4.02, or 3.4 percent, to $121.47 and American Airlines gained $1.55, or 3.4 percent, to $45.15.
The pound edged up 0.1 percent to $1.3175 after losing 0.25 percent on Monday.
NORTH KOREA: North Koreans observed 69th anniversary of the country's founding, but it the country did not test another intercontinental ballistic missile, as South Korea's government had warned it might do. The S&P 500 gained 6.22 points, or 0.25 percent, to 2,494.33 and the Nasdaq Composite added 10.32 points, or 0.16 percent, to 6,442.58. The Fed has a 2 percent inflation target. The price of gold fell $14.20, or 1.1 percent, to $1,337 an ounce. Apple, which will unveil its newest iPhone on Tuesday, rose $2.30, or 1.4 percent, to $160.93 and Facebook rose $2.35, or 1.4 percent, to $173.30. Microsoft added 71 cents, or 1 percent, to $74.69 and Mastercard rose $4.15, or 3 percent, to $141.37. They climbed last week after investors anticipated their business could pick up as homeowners were affected by the storm.
Spot gold dropped 1.4 percent to $1,327.40 an ounce. "The only problem with this is that, with the United Nations having just agreed on new sanctions against North Korea - spearheaded by the USA - I wonder how long we will have to wait for an act of provocation in response".
Wholesale gasoline lost 1 cent to $1.63 a gallon.
The kiwi traded at 89.97 Australian cents from 90.11 cents in NY and fell to 78.56 yen from 78.68 yen.
- The Japanese yen sank 1.5 percent, the most since January, to 109.45 per dollar. The euro slid to $1.1962 from $1.12028.
OVERSEAS: Germany's DAX gained 1.4 percent and the French CAC 40 rose 1.2 percent. MSCI's emerging markets index rose 0.73 percent.
- The Stoxx Europe 600 Index jumped 1 percent to the highest in a month. South Korea's Kospi advanced 0.7 percent and Hong Kong's Hang Seng added 1 percent.