World stocks hit an all time high on Thursday, February 16, as the latest round of robust global data matched hopes that major economies like the United States will soon be serving up large helpings of fiscal stimulus.
MSCI’s All Country World index, which spans 46 countries, notched the milestone as Wall Street hit its latest record and Asia and Europe consolidated the roughly 10 percent gains both have made since mid-December.
There were surges in exports from Indonesia and Taiwan, falls in unemployment in Europe from Sweden to the Netherlands while stronger U.S. retail sales and inflation data on Wednesday came as Donald Trump again promised mass tax cuts.
“With the exception of politics, I have rarely seen such as network of positive signals,” said ABN Amro’s chief investment officer Didier Duret.
“There is a momentum, we don’t know when it will stop, but at the moment it is strong,” he said. “Investors are rather underinvested anyway and there is lots of cash so equities are the asset class of default in this environment.”
Another reason for the upbeat mood has been that, unlike in recent years, the prospect of U.S. interest rate rises – which tend to set the bar for global borrowing costs – does not seem to be spooking markets.
The dollar is still down for the year despite a strong run over the last couple of weeks, while Treasury yields, have barely risen, which has helped propel emerging market bonds, stocks and many currencies higher.
