Stocks are positive, bond yields are on the rise and dollar is gaining strength on Monday morning. Trump-watching is still the pastime of choice. Surprisingly strong Japanese GDP growth helped sentiment in Asia and has passed through to a positive start in Europe.
Well-received corporate updates from Taylor Wimpey (LON:TW), William Hill (LON:WMH) and DCC (LON:DCC) built on top of gains in financial and basic resource shares to push the FTSE 100 up over 1%. DCC is leading the gains on the FTSE 100 after the Irish investments group raised its profit outlook.
US stocks look set for a higher open and another new record high for the Dow Jones Industrial Average, now on the march towards 19,000. Donald Trump’s staff appointments will signpost whether the notable sector rotation that began in the wake of the election result actually makes sense.
The move into financials and basic materials is part of a reflation trade that started before the election, though it has clearly accelerated since. A return to New Deal-esque infrastructure spending is probably one of the areas Donald Trump will struggle the most to get through the fiscally-conservative Republican congress. That makes the rise in industrial and construction stocks the most vulnerable.
USA pre-opening levels
S&P 500: 7 points higher at 2,171
Dow Jones: 86 points higher at 18,933
Nasdaq 100: 15 points higher at 4,766
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