Global Shares Mostly Up on Thursday 01/21 05:46
Global shares mostly rose Thursday on optimism over the new U.S.
administration that earlier set off a rally on Wall Street.
TOKYO (AP) -- Global shares mostly rose Thursday on optimism over the new
U.S. administration that earlier set off a rally on Wall Street.
Hopes are high that President Joe Biden's administration will mean more
support for the struggling U.S. economy, starting a recovery that's crucial for
the export-driven Asian region and the rest of the world.
France's CAC 40 gained 0.4% in early trading to 5,648.29, while Germany's
DAX rose 0.6% to 14,003.82. Britain's FTSE 100 edged up nearly 0.2% to
6,753.08. U.S. shares were set to drift higher with Dow futures up nearly 0.1%
at 31,116.5. S&P 500 futures rose 0.2% to 3,850.62.
Japan's benchmark Nikkei 225 rose 0.8% to finish at 28,756.86. Australia's
S&P/ASX 200 gained 0.8% to 6,823.70, while South Korea's Kospi edged up 1.5% to
3,160.84. Hong Kong's Hang Seng slipped 0.1% to 29,927.76, while the Shanghai
Composite added 1.1% to 3,621.26.
Data released by the Japanese Finance Ministry showed the world's third
largest economy may be crawling toward a recovery, as exports for December rose
for the first time in two years, by 2% from the same month the previous year.
Imports declined 11.6%, marking the 20th straight month of declines.
Japan's economy, like many others across the region, has been slammed by the
coronavirus pandemic, which has crushed tourism and dampened economic activity
and trade. The Bank of Japan kept its easy monetary policy at its policy board
meeting, as expected. Tokyo and other urban areas of Japan are under a state of
emergency, as coronavirus cases have surged lately.
Biden took a flurry of executive actions in his first hours as president. He
also pitched a plan to pump $1.9 trillion more into the struggling economy,
hoping to act quickly as his Democratic party now controls the White House and
both houses of Congress.
The hope on Wall Street is that such stimulus will help carry the economy
until later this year, when more widespread COVID-19 vaccinations get daily
life closer to normal.
"Most of Wall Street is assuming that the second half (of 2021) is when we
will see pent-up demand start to show up in the economy, and that will push
economic indicators higher and will likely cause a ramp up in earnings
projections," said Sam Stovall, chief investment strategist at CFRA.
Gains for stocks have been accelerating since Biden's election on enthusiasm
about COVID-19 vaccines and potential economic moves. The bump for stocks
between Election Day and Biden's inauguration was bigger than Trump's bump
between his election and inauguration.
"The market is up more than 13% since Election Day," Stovall said, noting
that since World War II, the S&P 500 has risen an average of 3.5% in the first
100 days of a Democratic president's administration, versus an average gain of
0.5% when a Republican was in the White House.
Analysts have been expressing concerns about pricey stock values heading
into the latest round of corporate earnings, but they look more reasonable amid
the backdrop of historically low interest rates, said Solita Marcelli, chief
investment officer, Americas, at UBS Global Wealth Management. The low rates,
along with new stimulus and the continued rollout of vaccines, will likely help
bolster markets and the recovery.
"We think that global growth is going to continue to pick up," she said.
In energy trading, benchmark U.S. crude gained 26 cents to $53.24 a barrel.
Brent crude, the international standard, fell 37 cents to $55.71 a barrel.
In currency trading, the U.S. dollar slipped to 103.54 Japanese yen from
103.76 yen. The euro cost $1.2119, down from $1.2134.