US markets lead a global rally on the back of stronger economic data and oil price momentum
Stronger economic data boosted the US markets today.
Markets
US markets rallied yesterday led by energy stocks, which continued to benefit from the rise in oil prices, and more positive sentiment on a Greek bailout deal. The Dow rose 236.36 points, or 1.33 percent, to 18,000.4, the S&P 500 gained 25.05 points, or 1.2 percent, to 2,105.2 and the Nasdaq Composite added 62.82 points, or 1.25 percent, to 5,076.69.
Asia Pacific markets also responded positively to Wall Street gains on Thursday with all the major markets ending higher with the Nikkei up 1.68 per cent to close at 20,382.97, Hong Kong’s Hang Seng rising 0.8% to end the day at 26,907.85 and the S&P ASX 200 booked a 1.43% increase closing at 5,556.7. The Straits Times Index ended 30.64 points or 0.93% higher to 3,325.77. While China’s Shanghai Composite climbed just 0.3%, it is still the world’s best performing stock market with a 149% rise in the past year, according to CNN.
Economic news
The US Commerce Department released its eagerly anticipated retail sales data on Thursday with 1.2 percent growth last month, surging from the revised 0.2 percent gain in April. US households increased spending on cars, furniture, clothes, online shopping, sporting goods and building materials. This was despite increases in petrol prices, the latest sign economic growth is finally gathering steam according to a report in Reuters.
This solid retail sales data combined with robust job growth in May and stabilising manufacturing activity supports the view that the Fed will raise interest rates this year. Although in a report released on Wednesday by the World Bank, which trimmed 2015 global growth forecasts down 0.2% to 2.8%, chief economist Kaushik Basu has urged the Fed to put off any rate hikes until next year to assist global economic recovery especially in emerging markets.
In other economic news, Standard Poor’s has confirmed the US credit rating of AA+, citing in a statement the high level of government debt as well as a lack of political cohesion amongst the main political parties as being the major constraints to the rating, reported AAP.