FTSE carries all before it

The FTSE 100 is, it seems, unstoppable, with the index adding 40 points as the close looms.

-       FTSE surge refuses to slow
-       US awaits Trump press conference
-       Oil prices lift despite healthy inventory build

The FTSE 100 is revelling in yet another record high, but this time other stock markets are racking up gains too, as the environment turns congenial for risk assets once more. Of course, much of this is the impact of the ongoing fall in sterling, as the pound pushes below the $1.21 level for the first time since its sudden crash at the beginning of October last year. Currency effects are helping Eurozone indices for a change, too, as a steep drop for the euro sees the Dax edge to fresh highs for the year. It remains foolish to stand in front of the equity market train – regardless of concerns about valuations the market is determined to keep moving higher off the back of the ‘Trump surge’. Outside of the Dow, which is looking to try a run at 20,000 once more, US markets are little changed, with the Trump press conference clearly keeping traders nervous – given what has transpired over the past few hours, we may be treated to quite the performance from the president-elect.

Crude oil has bounced back this afternoon as well, despite a hefty build in US oil inventories. Signs of further cuts to Saudi output is helping to keep belief in the OPEC deal alive, but with the US evidently ramping up output it is becoming questionable whether the output reduction narrative can be maintained. Reality has yet to dawn for both equity and oil markets, and the outcome could be ugly indeed if disappointment sets in. Earnings season, which could well flag up the deleterious impact of a stronger dollar, could be the moment when real life intervenes.