At close to 4pm the Dow Jones was well past the 22,300 threshold at 22,335, up +0.30%, while the S&P500 slid over the 2,500 barrier to 2,506. All-time record levels for both indexes despite escalating North Korean tension and sluggish inflation. Plus two searing hurricanes that have damaged industrial output and raised day-to-day cost of living expenses for many Americans.
The share exuberance is part-premised on the anticipation that the chairman of the Federal Reserve, Janet Yellen, will shortly signal the beginning of the end of US economic stimulus – the Fed meets tomorrow and Wednesday.
The stock market positivity was all over Europe also with the FTSE 100 climbing almost 40 points at the close of business at 7,253 tonight. BAE Systems was the biggest riser, up +4% to 620p while Johnson Matthey climbed +2.6%. Provident Financial was again on the skids, down -5.8%.
Gold was down almost -0.90% at 4.10pm at 1,309. The euro pushed up against the dollar lifting +0.21% higher at $1.1960 while the pound was down -0.40% at $1.3518 as talk of more Fed tightening increases.
- UK FTSE 100 7,253 +0.37%
- Dow 22,335.07 +0.30%
- S&P 500 2,506.11 +0.23%
- Nasdaq 6,468.65 +0.31%
- Nikkei 225 19,909.50 +0.52%
- DAX 12,557.05 +0.31%
- CAC 40 5,226.01 +0.23%
- Gold 1,313.80 -0.85%
- Oil WTI 49.71 -0.36%
Carney hints at rate rise again
There’s more rate hike mood music coming from the Bank of England – indeed from the governor, Mark Carney, himself. At an IMF speech in Washington earlier today Carney said inflationary pressures and a more vigorous pre-Brexit economy was bringing clear pressures.
“The case for a modest monetary tightening is reinforced by the possibility that global r* (equilibrium interest rates) may be rising, meaning that monetary policy has to move in order to stand still,” Reuters reported Carney as saying.
Bank of England Monetary policy committee member Gertjan Vlieghe has shown himself consistently doveish but he has also suggested a rate rise may be on the cards sooner than later.
Ryanair faces up to €20m in compensation costs
More concern for Ryanair. The airline is looking at compensation claims of potentially €20m following thousands of cancelled flights due to poor pilot holiday planning.
In reality Ryanair claims less than 2% of all its flights will be affected, but the bad publicity is highly unwelcome given Ryanair’s reach plus the interest in the break-up of Air Berlin. The most badly hit airport is Stansted with many flights to Eastern Europe and Scandinavia cancelled.
However this is increasing speculation that Ryanair has lost pilots to Norwegian. “We can confirm that 140 pilots have joined us from Ryanair this year,” a Norwegian spokesperson informed the BBC. “Pilot recruitment is also underway for more pilots for our new Dublin base opening later this year,” added Norwegian. Ryanair shares slipped -2% today to €16.77.
Breaking news: Cisco Systems' executive chairman John Chambers is to quit at the end of the year. RBS boss Ross McEwan says the EU's consent for RBS' strategy for its Williams & Glyn division is positive news: "We are pleased that we now have final approval from the European Commission for the Alternative Remedies Package. This allows us to resolve our final State Aid divestment obligation and brings welcome clarity for our customers and staff."