America’s has surged to within a whisker of its all-time high, despite a clutch of issues that may have been thought likely to cast a shadow over stock prices.
The 30-share index, the most venerable of the world’s major benchmarks, closed Tuesday night at 26,246.96, up 0.71% on Monday’s close.
On a rolling three-month basis, it has climbed steadily from 24,700.21 on 19 June. The Dow’s all-time high was reached on 26 January, when it hit 26,616.71.
Growth and personal income higher
Trade battles with China, political difficulties at home for the Trump administration, and a steady rise in interest rates from America’s central bank, the Federal Reserve, could have proved bearish for stocks. Donald Trump has set great store by business-friendly tax cuts and other stimulus measures, and his difficulties may have spooked investors.
This does not yet seem to have been the case, with markets shrugging off both legal manoeuvres against the President and possible reverses for his Republican Party in the mid-term Congressional elections in November.
Personal income and spending are also heading higher, while unemployment was running in August, the most recent available figure, at just 3.9% of the workforce, was well below the 4.5% which is believed to be the Fed’s undisclosed target.
Chinese tariffs less stringent than feared
Meanwhile, despite a gradual but steady programme of interest-rate rises, the has not taken off against the euro, threatening to price American goods out of the European market. Instead, it has traded in a fairly narrow range since the start of 2015, between €0.8333 and €0.8570 and rarely breaking above €0.95.
China has announced retaliatory tariffs against American goods as part of the trade dispute between the two countries. It revealed levies of 5% to 10% on $60 billion-worth of US products, taking effect on 24 September, a response to the White House’s announcement of 10% of tariffs on $200 billion of Chinese goods, coming into force on the same date.
Investors took the view that the Chinese measures could have been more stringent, thus refused to let them dampen the mood.
However, the broader-based is also storming ahead, closing on Tuesday at 2,888.80. On a rolling three-month basis, the S&P 500 stood at just 2,773.75 on 19 June.
The S&P 500’s all-time closing high was achieved on 29 August, at 2,914.04, its first close ever above the 2,900-point level.