U.S. stocks end at records; Strong pound weighs on FTSE

NEW YORK CITY, USA – World stock markets mostly rose Tuesday, September 12, with Wall Street scoring fresh records as concerns over North Korea and US hurricanes faded, but London dipped as strong inflation data sent the pound to a one-year dollar peak.

All 3 major US indices pushed to fresh records, with the S&P 500 notching a second straight peak, propelled by financial shares after bond yields rallied.

Frankfurt and Paris equities also gained as the North Korea crisis eased and dealers breathed a sigh of relief that Hurricane Irma caused less damage to Florida than initially feared.

“You’ve seen that fear unwind,” said David Levy, portfolio manager at Republic Wealth Advisors.

Analysts also described relief that September, historically a weak month for stocks, has not so far produced a big pullback.

“Investors with a lot of cash have to put some money to work,” Karl Haeling of LBBW. “They can’t afford to miss more of the rally.”

But London’s benchmark FTSE 100 index was hobbled as official data showed Britain’s 12-month inflation rate jumped to 2.9% in August compared to 2.6% in July.

In reaction, sterling jumped on hopes the Bank of England could lift its key interest rate sooner than expected, although it is not forecast to make any change at its policy meeting on Thursday.

Spreadex analyst Connor Campbell said that “sterling’s FTSE-damaging rise prevented the UK index from indulging in the same North Korea and Hurricane Irma-related relief that lifted the US markets last night and is continuing to work its magic on the eurozone bourses.” 

“The effect has been to push the FTSE 100 into negative territory with London’s main index stumbling, while across the channel eurozone stocks continue to find buyers,” added Chris Beauchamp, chief market analyst at IG.

The British index finished down 0.2%.

Among individual companies, Apple dipped 0.4% after unveiling a group of new iPhones, including 10th anniversary iPhone X, featuring facial recognition unlocking and other refinements. 

DowDuPont advanced 2.5% after confirming it was on target to save $4 billion following the completion of its merger. The chemicals giant also tweaked its plan to restructure into three companies to try to placate some shareholder activists who had criticized the original plan. 

Eyes will now turn to the release of US inflation figures later in the week, which could provide some clues as to the Federal Reserve’s plans for raising interest rates again this year. A weak run of data in recent months has led dealers to lower their expectations for any more tightening. – Rappler.com