Lucky 13? Stocks score longest run of monthly gains on
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[November 30, 2017]
By Marc Jones
LONDON (Reuters) - A dive in high-flying
U.S. tech stocks on worries their boom may have peaked left investors
wondering on Thursday whether the longest global equity bull run in
living memory might be starting to splutter.
The caution was sparked by another Wall Street wobble involving a
rotation from tech to financials which came just as the near 9-year
global rally prepared to notch up another impressive milestone.
The world’s broadest equity gauge – the MSCI all-country index – was on
course to finish November with its 13th straight monthly gain on
Thursday – the longest winning streak in the index’s 30-year history.
Lucky for some.
Though the celebrations were muffled by the tech problems - Samsung and
China stocks had also taken another tumble in Asian trading [.SS] - the
mood improved again in Europe.
Germany's Dax <.GDAX> and France's CAC 40 <.FCHI> both inched up for a
third day, and though London's FTSE <.FTSE> lagged as hopes of a
breakthrough in Brexit negotiations pushed the pound higher again, Wall
Street futures <ESc1> pointed to U.S. rebound later. [.N] [GBP/]
The latest Reuters global asset poll showed the majority of investors
expect shares to keep rising. Robeco strategist Peter van der Welle was
one of those, despite noting the market was "playing in extra time".
"In the absence of a near-term recession trigger, current stretched
equity valuations do yet not instil enough fear to change overall market
direction," he said.
Possibly feeding the tech concerns was a Morgan Stanley report earlier
this week that the "super-cycle" in memory chip demand looks likely to
Shares of Amazon.com <AMZN.O>, Apple <AAPL.O>, Google parent Alphabet <GOOGL.O>
Facebook <FB.O> and Netflix <NFLX.O> slid between 2 percent and 5.5
percent on Wednesday. [.N] Asia's bellwether Samsung <005930.KS> then
slumped 4.3 percent to two-month lows.
Tech nerves were not just confined to stocks. Rocketing cryptocurrency
Bitcoin <BTC=BTSP> dropped a cool $1,000 to a low of $9,250 before
spending European hours pinballing between $9,700 and $10,100.
For perspective, though, the Nasdaq index is still up 26.8 percent so
far this year, roughly 7 percentage points more than the MSCI world
<.MIWD00000PUS>. For Bitcoin it is a mind-boggling 950 percent. http://tmsnrt.rs/2zJqD6m
"It is true that if you look at the world's semiconductor sales on
chart, their year-on-year growth appears to be peaking out," said
Hiroshi Watanabe, an economist at Sony Financial Holdings. "But if you
look at what's driving demand, it's not just smart phones and actually a
lot of things."
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A man looks at a stock quotation board outside a brokerage in Tokyo,
Japan, April 18, 2016. REUTERS/Toru Hanai
DOLLAR IN THE DOLDRUMS
In the more mainstream FX markets, the U.S. dollar climbed to 112.25 yen <JPY=>,
held its ground versus the euro <EUR> but fell to a two-month low of $1.3480 to
the resurgent pound <GBP=>. Measured against major peers the dollar is headed
for biggest monthly drop since July. [FRX]
The U.S. Senate took a step on Wednesday toward passage of tax legislation that
is a top White House priority, setting up a likely decisive but finely-balanced
vote later this week.
Investors also seem to have grown cautious about the outlook of the world's
biggest economy and there are growing signs that it certainly won't be the only
country raising interest rates.
J.P. Morgan Asset Management global head of rates David Tan predicted on
Thursday that there will be some 1,000 rate hikes globally over the next decade.
"The current period of economic expansion has therefore been extraordinarily
long, almost 10 years and counting, but we know that the days of super low
global central bank rates are in the process of coming to an end," he said.
Borrowing costs in Germany, the euro zone's benchmark bond issuer, rose to their
highest in just over two weeks. The 10-year U.S. Treasuries yield climbed too,
reaching 2.3859 percent <US10YT=RR> to near this month's high of 2.414 percent.
There was no market response after U.S. President Donald Trump nominated
Carnegie Mellon University professor Marvin Goodfriend, viewed as a policy hawk,
to be a member of the Federal Reserve Board of Governors.
Oil meanwhile moved higher again as OPEC meet in Vienna to debate an extension
of the group's supply-cut agreement.
While the Organization of the Petroleum Exporting Countries and key non-member
Russia look set to prolong oil supply cuts until the end of 2018, they have
signaled that they may review the deal when they meet again in June if the
U.S. crude futures <CLc1> traded at $57.72 per barrel in European trade, up 1.4
percent, while Brent futures <LCOc1> rose 0.7 percent to just over $64 a barrel.
(Reporting by Marc Jones; editing by Mark Heinrich)
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