Global stocks edged higher on Wednesday, shrugging off faltering oil prices and reports of soft iPhone X demand, as a rally in copper buoyed expectations for a strong year for the global economy in 2018.
Global stocks edged higher on Wednesday, shrugging off faltering oil prices and reports of soft iPhone X demand, as a rally in copper buoyed expectations for a strong year for the global economy in 2018. Copper prices rocketed to multi-year highs, pushing the MSCI world equity index, which tracks shares in 47 countries, up 0.22 percent. The metal, used in construction and machinery, is seen as a proxy for global growth. “The rally in copper supports expectations that 2018 is going to be a strong year for synchronized global growth,” said Greg McKenna, chief strategist at AxiTrader. Copper rose 1.32 percent to $7,219 a tonne, its highest in nearly four years, on expectations of robust demand from top consumer China in 2018. The metal could also be getting a boost from expectations that U.S. lawmakers will turn their attention to infrastructure spending after signing a massive tax overhaul into law last week, said Tom Stringfellow, chief investment officer at Frost Investment Advisors. Shares in Asia, Europe and the United States managed to advance slightly, adding to a strong calendar year of gains despite reports of lackluster demand for Apple Inc’s iPhone X, mixed U.S. economic data and a stalled recovery in oil prices. Trading during the holiday-shortened week was thin, with many traders and investors away ahead of New Year’s Day. MSCI’s index of Asia-Pacific shares closed 0.24 percent higher. The pan-European FTSEurofirst 300 index ended the day up 0.03 percent. Emerging market stocks rose 0.51 percent.
Apple ultimately rose 0.02 percent, one day after shares posted their worst single-day percentage fall since Aug. 10. The drop came after Taiwan’s Economic Daily cited unidentified sources as saying Apple would slash its sales forecast for its flagship phone in the current quarter. Also weighing on stocks, oil failed to sustain a rally that sent it to multi-year highs a day earlier on supply concerns. U.S. crude fell 0.6 percent to $59.61 per barrel and Brent was last at $65.86, down 0.9 percent on the day. U.S. economic news sent mixed signals. The Conference Board Consumer Confidence Index registered at levels below consensus for December, while the National Association of Realtors reported pending home sales higher than economists had forecast for November. The Dow Jones Industrial Average rose 28.09 points, or 0.11 percent, to 24,774.3, the S&P 500 gained 2.12 points, or 0.08 percent, to 2,682.62 and the Nasdaq Composite added 3.09 points, or 0.04 percent, to 6,939.34.
DOLLAR DIPS, BONDS RALLY
The dollar fell 0.23 percent against a basket of major currencies as commodity-linked currencies gained and as traders bet improved global growth would spur major central banks to begin reducing monetary stimulus in 2018. Though stocks inched up, there was an undercurrent of nervousness in the market that pushed some investors into government bonds, pushing their yields lower. Benchmark 10-year notes last rose 15/32 in price to yield nearly 2.413 percent, from 2.467 percent late on Tuesday. “The buying has been strong since the early morning,” said Thomas Simons, a money market economist at Jefferies in New York, as investors rebuilt positions in bonds after they under-performed earlier this month. “Geo-political risks have notched a little higher, supporting rates markets,” said Mizuho’s head of rates Peter Chatwell, referring in particular to a renewal in tensions around North Korea. The United States announced sanctions on two North Korean officials behind their country’s ballistic missile program on Tuesday after the U.N. Security Council unanimously imposed new sanctions on North Korea last week. “The North Korean statement that U.N. sanctions are an act of war is, as tends to be the case, an exaggeration, but nevertheless, the market has no choice but to price it. Some safe-haven positioning is a natural reaction,” said Chatwell.