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GLOBAL MARKETS-Shares scale record peak on upbeat results, dollar eases

Credit: REUTERS/BRENDAN MCDERMID

A gauge of global equity markets jumped to an all-time peak on Wednesday, after the S&P 500 and Nasdaq rallied to fresh records on upbeat corporate results, while the dollar eased a day before the Federal Reserve potentially sets a new course on inflation.

By Herbert Lash

NEW YORK, Aug 26 (Reuters) - A gauge of global equity markets jumped to an all-time peak on Wednesday, after the S&P 500 and Nasdaq rallied to fresh records on upbeat corporate results, while the dollar eased a day before the Federal Reserve potentially sets a new course on inflation.

MSCI's all-country world index surged past a pre-COVID high reached in February as investors drove up technology stocks after Salesforce.com Inc raised its annual revenue forecast on surging demand for the company's online business software.

Salesforce, which is slated to join the blue-chip Dow Jones Industrial Average index on Aug. 31, reflects the reality of the world we live in, said JJ Kinahan, chief market strategist at TD Ameritrade in Chicago.

"If you look at the stocks that are actually driving the rally and the companies that everybody is using, it really is a technology-leading society at this point, especially with COVID," Kinahan said.

Salesforce shares CRM.N soared 24.1%.

Adding to the upbeat mood was early data from Moderna's MRNA.O experimental COVID-19 vaccine which showed it induced immune responses in older adults that were similar to those for younger participants.

The S&P 500 and the Nasdaq have hit daily record closing highs since Friday, driven by demand for tech-focused stocks, government stimulus and record low interest rates.

Better-than-expected economic data in Europe has lifted analysts expectations for earnings, driving regional bourses higher, too. Benchmark indexes in Frankfurt .GDAXI, Paris .FCHI and London .FTSE closed up 0.98%, 0.80% and 0.14%, respectively.

The likelihood of a COVID-19 vaccine being introduced in early 2021 combined with very low interest rates and an outlook that rates stay low for longer are driving equities higher, said Sam Stovall, chief investment strategist at CFRA in New York.

"Until we really start to see a worry that interest rates are likely to start to move higher, I still see growth in general, tech and consumer discretionary in particular, holding up very well," he said.

The MSCI index .MIWD00000PUS, a gauge of equity performance in 49 countries, rose 0.82% to 583.61, passing its previous record of 581.02.

Apple Inc AAPL.O, Microsoft Corp MSFT.O, Amazon.com AMZN.O, Alaphabet Inc's Google GOOGL.O and Facebook Inc FB.O - account for 12.3% of the benchmark's weighting.

Europe's broad FTSEurofirst 300 index .FTEU3 closed up 0.80%, while on Wall Street the Dow Jones Industrial Average .DJI rose 0.21%, the S&P 500 .SPX gained 0.89% and the Nasdaq Composite .IXIC added 1.43%.

Investors are focused on whether Federal Reserve Chairman Jerome Powell will hint at shifting the Fed's inflation target to an average when he addresses the U.S. central bank's policy framework review at the Jackson Hole symposium on Thursday.

Investors are betting that when he speaks, Powell will create expectations of more inflation, said Jim Vogel, interest rate strategist for FHN Financial.

The dollar index, which tracks the greenback's value against a basket of currencies =USD fell 0.053%.

Earlier the index hit a session high of 93.37 after data showed that U.S. durable goods orders increased more than expected in July.

The euro EUR= fell 0.09% to $1.1822.

The 10-year U.S. Treasury US10YT=RR note rose 0.6 basis points to 0.6884%.

Euro zone bonds were flat, with safe-haven Bund yields DE10YT=RR rising a smidgeon after enduring on Tuesday their biggest daily losses since May as better German economic data and trade dented hunger for government debt.

Oil prices traded little changed, pressured by worries about the demand outlook during the coronavirus pandemic but buoyed as U.S. producers shut output in the Gulf of Mexico ahead of Hurricane Laura.

Producers evacuated 310 offshore facilities and shut 1.56 million barrels per day of crude output, 84% of Gulf of Mexico's offshore production - near the 90% outage that Hurricane Katrina brought 15 years ago.

Brent crude futures LCOc1 slid 22 cents to settle at $45.64 a barrel. U.S. crude futures CLc1 settled up 4 cents at $43.39 a barrel.

Gold jumped more than 1% as the dollar slipped. U.S. gold futures GCv1 settled up 1.5% at $1,952.50 an ounce.

Emerging markets http://tmsnrt.rs/2ihRugV

(Reporting by Herbert Lash, additional reporting by Ross Kerber in Boston; Editing by Tom Brown)

((herb.lash@thomsonreuters.com; 1-646-223-6019; Reuters Messaging: herb.lash.reuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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