(Bloomberg) -- All four major U.S. equity benchmarks climbed to record highs as oil jumped on optimism OPEC will agree to cut output. The dollar halted its longest advance ever against the euro.
The S&P 500, the Dow Jones, the Nasdaq and the Russell 2000 rallied together to their all-time peaks for the first time since 1999. Oil surged as Iran signaled optimism that OPEC will agree to a supply-cut deal and Iraq said it will offer new proposals to help bolster unity before next week’s meeting in Vienna. The greenback’s decline versus the shared currency was its first in 11 days. Yields on two-year Treasury notes climbed to the highest level this year.
American stocks achieved the new milestone as companies ended a five-quarter profit slump and Donald Trump’s election fueled optimism that his plans to cut taxes and boost fiscal spending will benefit industries more geared toward economic growth.
The search for low-touch mutual funds has shifted "disproportionate" client money into fixed income, an analyst says.
Acknowledging the strength in the economy, Federal Reserve Chairwoman Janet Yellen said Thursday that the central bank is close to lifting interest rates.
“There’s optimism that it’s more likely that Trump is going to put us on an economic fast track versus Clinton,” said Terry Morris, manager director of equities at BB&T Institutional Investment Advisors in Wyomissing, Pennsylvania. “The election had something to do with this, and I also think there’s some short covering going on. People that were hedging the election had to rush to cover after the news, and I think generally the perception is the economy is starting to pick up as the Fed is likely to raise rates in December.”
Traders are now pricing in a 100% chance of a move next month, compared with a 68% probability in the beginning of November. If the Fed doesn’t act as expected, it may bring on more market turmoil, says Seven Investment Management’s Ben Kumar.
The S&P 500 rose 0.8% to 2,198.18 at 4 p.m. in New York. The Dow Average and the Nasdaq advanced more than 0.4%. The Russell 2000 of smaller companies rose for a 12th day in its longest rally since 2003.
“It’s a push on the upper end of the equity markets due to this renewed belief that there’s tax cuts and stimulus spending coming in 2017 and 2018,” said Chad Morganlander, a money manager at Stifel in Florham Park, New Jersey, where he helps oversee about $172 billion. “The overall equity markets are taking a cue from that and they are trading on the belief that earnings will move higher as well as revenues in 2017.”
