Market update: US markets up again while Asia and Europe take a breather – 11.09.2013

Source: Henderson Global Investors

The rally in US stocks continued on Tuesday giving the S&P 500 its longest winning streak since July. The index closed up 0.7% while the Dow Jones gained 0.9%. The latter is to have its biggest shake-up in almost a decade. Three stocks – Bank of America, Hewlett-Packard and Alcoa – will drop off the index to be replaced by Goldman Sachs, Visa and Nike, effective September 23. All ten S&P industry sectors ended higher, but the energy sector came under pressure from a drop in crude oil prices.

Despite the better sentiment on growing optimism for the Chinese economy and receding geopolitical tensions, the rally in Asian bourses took a breather overnight. Chinese and Australian stock markets were the winners; up 0.2% and 0.6% respectively. Australian shares were helped by the string of upbeat data from China, which is the country’s main consumer of natural resources. Japan’s Nikkei ended the day almost flat, with carmarkers and machinery shares outperforming.

The risk rally seems to have also taken a pause in European markets this morning. At the time of writing the FTSE Eurofirst 300 was barely flat, while the FTSE 100 shed 0.2%. Today sees the launch of what is likely to be the biggest corporate bond deal in history, with Verizon aiming to issue up to $49bn of debt across eight tranches, the order book for which is reported to have reached $100bn.