Saturday, 23 November 2013

US stocks hit new highs as another bear capitulates

US stocks rose on Friday to complete their seventh consecutive week of gains. The Dow Jones Industrial Average rose 0.34 percent and the S&P 500 Index rose 0.50 percent, both ending at record highs.

With the continuing bull run in stocks, Eclectica hedge fund manager Hugh Hendry has become the latest bear to capitulate. At a conference on Friday, Hendry said that the currency war between the US and China has boosted risk assets. “I can no longer say I am bearish,” he said. “We are in this virtuous loop where the market is trending.”

Sam Ro at Business Insider says that Hendry joins several other long-time bears who have recently talked about stocks going higher, including John Hussman, Jeremy Grantham, Richard Russell and Bob Janjuah.

Meanwhile, economic data on Friday were mostly positive.

In Germany, the Ifo Institute’s business climate index rose to 109.3 in November, the highest level in more than 1½ years, from 107.4 in October. Another report confirmed that Germany's GDP grew 0.3 percent in the third quarter.

In Japan, the government kept its evaluation of the overall economy unchanged in November but downgraded its assessment of exports for the third straight month.

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