Saturday, 4 November 2017

Markets hit records but at risk from overheating

Markets were mostly up on Friday.

The S&P 500 rose 0.3 percent to close at another record high while the STOXX Europe 600 rose 0.3 percent as the DAX 30 and FTSE 100 closed at record highs.

However, Asian stocks were mixed. The Hang Seng rose 0.3 percent but the Shanghai Composite fell 0.4 percent.

A report on Friday showed that US employment rose 261,000 last month while the unemployment rate fell to 4.1 percent from 4.2 percent the previous month.

“There was a good amount of jobs growth, a notable decline again in the unemployment rate, all of which sends the clear message that the labor market is tight,” said Charles Lieberman, chief investment officer of Advisors Capital Management.

Indeed, Torsten Slok, Deutsche Bank's chief international economist, thinks that global economic growth is strong and that the biggest risk is inflation.

“I think that the irony of all this is that the risks are not so much of a recession; the risk that we are facing in the markets today is there's a significant bigger risk of overheating,” he told CNBC on Thursday.

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