Market update: US and European stocks rally on Bernanke fillip

Source: Henderson Global Investors

Thursday saw US stocks reach record highs following the US Federal Reserve Chairman’s remarks on Wednesday that monetary policy would be accommodative for longer should economic conditions necessitate it. The sentiment was carried across to the bond markets where the US 10-year Treasury yield ended the day at 2.576%. The S&P 500 closed up 1.4%, the Dow Jones advanced 1.1% while the Nasdaq finished much firmer, up 1.6% as tech stocks were among the strongest gainers. JP Morgan and Wells Fargo will be the first banks to report quarterly results today. 

On Friday, Asian markets were mixed; the Nikkei was up 0.2% but the Hang Seng fell 0.9% and the Shanghai Composite fell 1.6%. China’s Finance Minister signalled that the Chinese economy could undershoot the government’s target for growth this year, and that the authorities would accept a growth rate below 7%. Second quarter gross domestic product growth is due to be released next week. At the time of reporting this morning European markets are gaining for a fifth day as investors are taking the lead from the US. The FTSE 100 and the FTSE Eurofirst 300 are both up 0.3% and 0.4% respectively.