US stocks surge to record highs

The S&P 500 notched up eight straight record closes in a row recently, while the small-cap Russell 2000 index saw its first record close since March.

Central banks may have made bond markets wobble, but stocks are still going from strength to strength, says Nicholas Megaw in the Financial Times. Strong US third-quarter earnings have put worries about inflation on the back burner. Profits at S&P 500 firms rose by about 40% year-on-year between July and September. Sales increased by roughly a fifth.  

“Large US companies are broadly managing to weather the surge in the prices of raw materials, supply chain bottlenecks and shortages in the labour market,” say Joe Rennison and Colby Smith in the same paper. Corporate profit margins have fallen back slightly, but by much less than analysts had been expecting.  

Major US stock benchmarks continue to make new record highs, says Mark DeCambre on MarketWatch. The S&P 500 notched up eight straight record closes through Monday this week, its longest streak of all-time peaks since 1997. Smaller companies have also joined the party: the small-cap Russell 2000 index has just had its first record close since March.   

“It doesn’t get any better than this for the stockmarket,” says Ben Levisohn in Barron’s. A “stellar” jobs report – the US economy added 531,000 jobs last month – only adds to a picture of an American economy regaining its vigour after a sluggish summer. There is growing hope that new antiviral treatments from Merck and Pfizer will soon draw a line under the pandemic era. 

To top it all, Congress has finally approved a $1.2trn infrastructure bill after months of wrangling. Equities fell by 5% in September, sparking talk of a correction (defined as a stockmarket decline of 10%). Instead, equities have since rallied by 7%. Is that a reason to sell? With the bulls out in force, probably not. “Bet on a rip-roaring rally into the end of the year.” 

Recommended

Coronavirus has had less of an impact on UK property than you might think
Property

Coronavirus has had less of an impact on UK property than you might think

The UK property market looked to have been turned upside-down as people abandoned city flats to work from more spacious homes in the country, while of…
29 Nov 2021
Index-linked bonds could prove a costly inflation hedge
Government bonds

Index-linked bonds could prove a costly inflation hedge

Index-linked bonds are designed to keep pace with inflation, but at these prices you are locking in a loss
29 Nov 2021
Three safe bets on the growing online gambling sector
Share tips

Three safe bets on the growing online gambling sector

Professional investor Aaron Fischer, creator of the Fischer Sports Betting and iGaming ETF, picks three of his favourite online gambling stocks.
29 Nov 2021
Why Britain’s supermarket chains should take over Europe
Retail stocks

Why Britain’s supermarket chains should take over Europe

Britain’s supermarkets should not sit back and wait for a takeover bid, says Matthew Lynn. They should launch their own for the continent’s chains.
28 Nov 2021

Most Popular

Don’t worry about the global population explosion – it’s unlikely to happen
Investment strategy

Don’t worry about the global population explosion – it’s unlikely to happen

One of the many things we are taught to worry about is the fast-rising global population. But in fact, says Merryn Somerset Webb, the opposite is tru…
15 Nov 2021
Four of the best new investment trust listings
Investment trusts

Four of the best new investment trust listings

Diversify your portfolio and benefit from rising dividends with these four new investment trusts coming to the market soon.
15 Nov 2021
Is it time to remortgage your home?
Mortgages

Is it time to remortgage your home?

Banks are already starting to prepare for higher interest rates, says Alex Rankine. Should you, too?
23 Nov 2021