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GLOBAL MARKETS-S&P 500 sets record high, dollar slips after Trump attacks Fed

Published 2018-08-21, 04:20 p/m
GLOBAL MARKETS-S&P 500 sets record high, dollar slips after Trump attacks Fed
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* S&P 500 notches all-time high

* Dollar falls for fourth day

* Emerging market shares gain

* Oil higher as Iran-driven rally gathers pace

* For a live blog on European stocks, type LIVE/ in an Eikon news window

By Herbert Lash

NEW YORK, Aug 21 (Reuters) - Global equity markets rose on Tuesday, with the S&P 500 setting a record high, fueled by strong earnings and economic growth, while the dollar weakened after U.S. President Donald Trump slammed the Federal Reserve for raising interest rates.

The S&P 500 .SPX rose as high as 2,873.23, topping the previous record of 2,872.87 set on Jan. 26, and was poised to mark another major milestone Wednesday when the bull market turns 3,453 days old. That will make it the longest such streak in the eyes of many market watchers. even at this point – a new all-time record and on the verge of being the longest bull market in history – it's got some room to run," said David Kelly, chief global strategist at JPMorgan (NYSE:JPM) Asset Management in New York.

Trump said in an interview with Reuters on Monday that he was "not thrilled" with the Fed under his appointee Chairman Jerome Powell for raising rates, and said the U.S. central bank should do more to boost the economy. also accused China and Europe of manipulating their currencies. The euro EUR= is down about 3.4 percent so far this year against the dollar, while the Chinese yuan CNY= has slipped 5.1 percent this year against the greenback.

"It would appear that Mr. Trump would like to keep the U.S. dollar a little on the weak side in order to remain competitive," said CMC Markets chief market analyst David Madden.

The dollar index .DXY , which tracks performance against a basket of six major currencies, fell 0.66 percent on Tuesday. It has slid almost 1.6 percent over the past four days, its worst such run since late March. dollar's weakness eased pressure on emerging markets, many of which have struggled in recent weeks as worries over Turkey sparked a sell-off in EM assets around the globe.

MSCI's benchmark emerging equities index .MSCIEF rose 1.02 percent and posted a third day of gains after Trump's comments.

MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.47 percent, while the pan-European FTSEurofirst 300 index .FTEU3 of leading regional shares closed up 0.20 percent, lifted by gains in Bayer (DE:BAYGN), Total and Novo Nordisk (CO:NOVOb). earnings reports, led by medical device maker Medtronic (NYSE:MDT) Plc's MDT.N posting a better-than-expected quarterly profit, lifted equities in both the United States and Europe.

Operating earnings have gained more than 25 percent year-over-year in the first two quarters, which JPMorgan's Kelly said is truly extraordinary in the bull market's 10th year.

"This is about to become the longest bull market in history. Because it's the most hated bull market, it's important to realize that the longevity has been helped by the fact people have been skeptical all the way along," he said.

Some remain skeptical because equities are relatively expensive.

A price/earnings multiple of 20 will make it hard for stocks to move materially higher in the near future, with earnings comparisons getting tougher and earnings growth slowing, said Michael Geraghty, equity strategist at Cornerstone Capital Group.

"There's not a whole lot of reasons for stocks in aggregate to move materially higher or lower anytime soon," he said.

The Dow Jones Industrial Average .DJI closed up 63.26 points, or 0.25 percent, to 25,821.95. The S&P 500 .SPX rose 5.86 points, or 0.21 percent, to 2,862.91, and the Nasdaq Composite .IXIC added 38.17 points, or 0.49 percent, to 7,859.17.

TRUMP WANTS "HELP" FROM THE FED

Trump, who had criticized the Fed when he was a candidate, said in the interview with Reuters that other countries benefited from their central banks' moves during tough trade talks, but the United States was not getting support from the Fed.

"During this period of time, I should be given some help by the Fed. The other countries are accommodated," Trump said.

The euro EUR= gained 0.79 percent to $1.157 while the Japanese yen JPY= weakened 0.31 percent versus the greenback at 110.42 per dollar.

U.S. Treasury yields rose on improving risk appetite and as investors awaited a speech by Powell in Jackson Hole, Wyoming, on Friday. for two additional Fed rate hikes this year were lower a day after Trump's comments.

Benchmark U.S. Treasury 10-year notes US10YT=RR fell 6/32 in price to yield 2.8442 percent.

Oil rose to its highest in a week, buoyed by the prospect of price support from U.S. sanctions on Iran, though the U.S.-Chinese trade dispute kept traders and analysts cautious. crude LCOc1 futures rose 42 cents to settle at $72.63 per barrel, and U.S. crude CLcv1 settled 92 cents higher at $67.35 per barrel.

U.S. gold futures GCcv1 for December delivery settled up $5.40 at $1,200 per ounce. GRAPHIC-Global assets in 2018

http://tmsnrt.rs/2jvdmXl GRAPHIC-Emerging markets in 2018

http://tmsnrt.rs/2ihRugV GRAPHIC-World FX rates in 2018

http://tmsnrt.rs/2egbfVh GRAPHIC-MSCI All Country World Index Market Cap

http://tmsnrt.rs/2EmTD6j INTERACTIVE GRAPHIC: The long bull run in context

http://graphics.thomsonreuters.com/testfiles/bull-run/ S&P 500 sets new all-tme high

https://reut.rs/2LdK88Q

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