World stocks on Tuesday, October 3, extended a run of record highs on signs of strong economic growth, while the dollar was slightly weaker against the euro as investors squared positions after a three-week rally and before several days of heavy U.S. data.
MSCI’s gauge of world stock performance hit a fresh all-time high, the three major stock indexes on Wall Street hit new record highs and overnight in Tokyo stocks hit two-year highs.
The gain in the MSCI benchmark was the 10th record high since late July and extended the year’s slew of records to more than 40 with little indication the run is about to end.
European shares closed higher at more than three-month highs while Spanish blue chips .IBEX were little changed as the central government and Catalonia appeared to carefully weigh their next move after Sunday’s violence-marred independence vote.
Investors want to know if the equity bull market has peaked but with earnings still growing, shares can continue to go up, said Frances Hudson, global thematic strategist at Aberdeen Standard Investments in Edinburgh.
“In the case of the market going higher and higher, the flows have been out of the U.S. equities. So if the market is going higher it’s another driver, and the other driver is probably earnings,” said Hudson, speaking in New York.
In the latest sign of economic growth, Delta Air Lines reported that its “cargo ton miles” metric rose 9.4 percent in September from a year earlier.
While margins deteriorated because of Hurricanes Harvey and Irma, cargo revenue was a bright spot for Delta, Cowen & Co. reported. Delta shares rose 6.6 percent, the fourth-largest contributor to gains in the benchmark S&P 500 index.
The Dow Jones Industrial Average .DJI rose 76.28 points, or 0.34 percent, to 22,633.88. The S&P 500 .SPX gained 3.19 points, or 0.13 percent, to 2,532.31 and the Nasdaq Composite .IXIC added 7.07 points, or 0.11 percent, to 6,523.79.
The pan-European FTSEurofirst 300 index .FTEU3 rose 0.19 percent to close at 1,535.44 and MSCI’s gauge of stock performance in 47 countries .MIWD00000PUS gained 0.32 percent.
Companies in the S&P 500 paid a record $105.4 billion in the third quarter and are trending higher in the fourth quarter, S&P Dow Jones Indices said. Dividends for 2017 are on track to post a 7 percent gain, S&P said.
“The fact dividends are up is very positive,” said David Joy, chief market strategist at Ameriprise Financial Services Inc. “The strength of the economy both at home and abroad is producing pretty good corporate earnings,” Joy said.
The dollar rose slightly against the Japanese yen, but slipped against the euro.
The dollar index .DXY was flat, with the euro EUR= up 0.1 percent to $1.1752 as the yen weakened 0.13 percent versus the greenback at 112.90 per dollar.
Stronger U.S. data along with the prospect of U.S. tax cuts and the likelihood of a further interest rate hike in December have boosted the U.S. currency in recent weeks.
