Wall Street closes in on record high as FTSE 100 surges
“This shows that, underneath the surface, the fourth-quarter economy was really pretty good,” said Jack Ablin, chief investment officer at BMO Private Bank. Investors around the world have been looking to the US economy to player a bigger role this year in strengthening the broader global recovery.
On Friday, policymakers in the US said that the easing of Europe’s debt crisis and signs that Chinese economic expansion is quickening are just as important to the recent brightening in sentiment. The global economy is “gradually improving”, said William Dudley, the head of the New York branch of the Federal Reserve. “Things aren’t perfect but I think that things are definitely improving and that will be helpful for the US outlook.”
A heady week for global stock markets prompted Citigroup to lift its year-end target for the FTSE 100 to 7,000 from 6,200. The index closed up 1.1pc to 6,347.24 yesterday. The buying spread to both Paris and Frankfurt, where the CAC 40 and the Dax jumped 1.1pc and 0.7pc respectively. In New York, the Dow Jones close up 1.1pc at 14,009.08, while the S&P finished 1pc firmer at 1,513.17.
“Global equities pushed higher as a plethora of positive data helped to solidify the gains made in recent weeks,” said Brenda Kelly, an analyst at IG Markets in London.
While traders snapped up shares, the pound was, however, again out of favour on the foreign-exchange markets. Against the euro, sterling slumped as low as €1.1473 and closed at its weakest since October 2011 against Europe’s single currency. Sterling has been pummelled by a combination of weaker economics reports from the UK, improving confidence in parts of Europe and the uncertainty now surrounding Britain’s future in Europe.