By Margreet Dietz
Dec. 29 (BusinessDesk) - Wall Street moved higher as did commodities, notably copper, as investors bet on sustained demand for the metal amid an upbeat outlook for the global economy and corporate profits.
Copper is on course for the longest winning streak since 1989, topping US$7,300 a metric tonne in London, according to Bloomberg.
“We expect this bullish sentiment to continue into 2018 on the basis of the stronger global demand,” Naeem Aslam, the chief market analyst at Think Markets UK, told Bloomberg.
A dip in the US dollar also added to sentiment for copper and other metals including gold and aluminum.
Wall Street gained. In 12.15pm trading in New York, the Dow Jones Industrial Average added 0.14 percent, while the Nasdaq Composite Index rose 0.13 percent. In 12pm trading, the Standard & Poor’s 500 Index advanced 0.08 percent.
US financial markets are set to close early on Friday and will be closed on Monday for the New Year’s Day holiday.
On Thursday, the Dow moved higher as gains in shares of UnitedHealth Group and those of Travelers, both recently up 0.6 percent, outweighed dips in shares of DowDuPont and those of Coca-Cola, each down 0.4 percent recently.
Corporate tax cuts as a result of new US tax legislation will help bolster further gains next year.
“Tax cuts will produce an increase in earnings and that is now incorporated into official sell-side estimates,” Brant Houston, managing director at CIBC Atlantic Trust Private Wealth Management in Colarado, told Reuters.
“However, I don’t think we should get used to returns like this, the trends looking forward will be more subdued than we saw in 2017,” Houston noted.
The windfall from lower taxes will prompt US companies to lift investments in plants and equipment, according to Bloomberg. In a survey compiled by Evercore ISI, about 36 percent of corporate executives plan to increase capital investment in 2018, four times more than in 2016.
“After a more or less anemic growth in capital spending, 2018 can be the year that makes a difference,” Walter Todd, Greenwood Capital chief investment officer, told Bloomberg. “The tax reform gives a strong incentive for companies to invest more in growth.”
In further evidence of a robust US jobs market, a Labour Department report showed that the number of Americans filing for unemployment benefits in the week ended December 23 was unchanged at 245,000 from the prior week.
In Europe, the Stoxx 600 Index ended the session with a 0.3 percent decline from the previous close. France’s CAC40 Index dropped 0.6 percent, while Germany’s DAX Index shed 0.7 percent.
The UK’s FTSE 100 index edged 0.03 percent higher.