Dow on cusp of new record

While the FTSE 100 has only managed to add ten points today, the Dow has returned to its previous highs.

• Markets brush aside inflation worries.

• Supply chain concerns easing too.

• Dow returns to the previous peak.

Rising costs don’t matter, it seems, so long as you can keep earnings rising as well. That is the theme that has emerged from corporate updates over the past week, and the market has eagerly latched on to the narrative as a useful counter to the supply chain crisis and rising inflation. Indeed the former of these may be on its way to easing too, as ports and railways run 24/7 in a bid to clear the backlog. It would be too early to consign these concerns to the rubbish basket of worries that crop up with regularity in this bull market, but perhaps we are near the end of the beginning, if not necessarily the beginning of the end of the problems. Further evidence of the improvement in the global outlook comes as Royal Caribbean announces a 274-night cruise – a sign if ever there was one that things are returning to normal.

Stock markets have performed well over the past week, emboldened by better earnings, with the Dow knocking on the door of a new record high. Sentiment has shifted remarkably in just a week, but then rallies can do that, as investors switch from doom and gloom to relentless optimism. We can only hope that the earnings season continues to deliver the goods.