NEW YORK/LONDON- Gold prices hit a seven-week high and global stocks scaled new records on Friday after strong US and Chinese economic data bolstered expectations of a solid global recovery from the coronavirus pandemic.
Government stimulus, strong corporate earnings from US banks and in Europe, along with signs of economic recovery in countries leading the COVID-19 vaccination race have all helped push stock market indexes to new heights this week.
MSCI’s broadest gauge of world stocks rose 0.42 percent to an all-time peak, lifted by surging European shares and lesser gains on Wall Street where both the Dow Industrial and benchmark S&P 500 posted their fourth week of successive gains.
As long as the strong economic rebound, tremendous fiscal and monetary support and progress on vaccine distribution remain in place, markets can grind higher, said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.
“Investors and market participants continue to underestimate both the economic and earnings recovery,” he said. “The earnings numbers have continued to exceed expectations by a very wide margin.”
First-quarter earnings are expected to rise 30.9 percent from a year ago, the highest since late 2010 when the economy was pulling out of financial crisis, according to Refinitiv data.
US homebuilding surged to nearly a 15-year high in March, the Commerce Department said on Friday, adding to robust retail sales data the prior day, suggesting the economy was roaring.
In Europe, the pan-regional STOXX 600 index closed up 0.9 percent at a new peak, while Germany’s DAX gained 1.3 percent to hit an all-time high and the UK’s FTSE 100 rose 0.5 percent to close at more than one-year highs.
On Wall Street, the Dow Jones Industrial Average rose 0.48 percent and the S&P 500 gained 0.36 percent, both setting new highs. The Nasdaq Composite added 0.1 percent as declines in the information technology sector weighed.
