- Global stocks surged to all-time highs on Friday after Donald Trump struck a deal with China to suspend tariffs set to go live on Sunday.
- Boris Johnson’s Conservatives delivered a landslide victory in Britain’s general election that paves the way for Brexit.
- Futures signal the S&P 500 and Nasdaq will rally from record levels, Britain’s FTSE 250 hit a new high on Friday, and Europe’s Stoxx 600 soared to a record.
- Domestic-focused UK stocks including Royal Bank of Scotland, Lloyds Banking Group, and EasyJet rallied by 10% or more.
- “Some investors will see today as Christmas come early, as we see a convergence of two critical political risks coming to some resolve,” one economist said.
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Global stocks surged to all-time highs on Friday after Donald Trump struck a preliminary trade deal with China to suspend tariffs set to go live on Sunday, and Boris Johnson’s Conservatives achieved a landslide victory in the UK’s general election.
The MSCI index of developed and emerging world equity markets touched an all-time high on Friday. In the US, the S&P 500 and Nasdaq indexes closed at record levels on Thursday, and futures signal stocks are set to rally again once markets open.
Britain’s FTSE 250 of domestically exposed stocks hit a new high on Friday, and Europe’s Stoxx 600 reached an intraday record.
Domestic-focused UK stocks including Royal Bank of Scotland, Lloyds Banking Group, and EasyJet, all rallied by 10% or more. The British pound rose by 1.8% against the US dollar to $1.34.
President Trump reportedly signed a phase-one agreement with China on Thursday to stave off an expansion of duties to $160 billion worth of smartphones, laptops, toys, clothing, and other Chinese imports. Meanwhile, the Tories won at least 364 seats in the House of Commons, surpassing the 326 needed for a majority and paving the way for Britain to leave the European Union.
“Some investors will see today as Christmas come early, as we see a convergence of two critical political risks coming to some resolve,” Dean Turner, an economist at UBS Wealth Management, said in an email. “Indications of a strong electoral outcome in the UK and developments towards a Phase 1 US-China trade deal have lifted the mood in the markets. “
Here’s the market roundup as of 9.01 a.m. in London (4:01 a.m. in New York).
- US stocks are set to rise with futures underlying the S&P 500 and Dow Jones Industrial Average are up 0.4%, while Nasdaq futures are up 0.6%.
- Asian equities climbed with China’s Shanghai Composite up 1.8%, Hong Kong’s Hang Seng up 2.6%, and Japan’s Nikkei up 2.6%.
- European markets are jumping with Germany’s DAX up 1.2% and the Euro Stoxx 50 up 1.3%.
- Oil prices climbed with West Texas Intermediate up 0.8% at about $59.60 a barrel, and Brent crude up 1% at $64.80.
- The pound held onto post-election Thursday evening gains, and was up 1.6% to $1.34 on Friday morning.
- The FTSE 100 benchmark of UK large caps rallied 1.7%, weighed down by internationally focused companies that decline when the pound rallies. A higher pound weakens revenue generated abroad.