Tuesday, March 30, 2010

Financial assets rally get broader

Finally, we are seeing commodities, China, Russia, stocks, etc rally together. We are entering the next phase of bull run. Looks like more bearish people are getting converted now. I'm still waiting for the last batch of people to get converted: retail investors!

March 29 (Bloomberg) -- Stocks and commodities gained as the dollar and the yen fell against the euro as signs of economic recovery sparked demand for higher-yielding assets. Oil rose the most in more than five weeks.

The Standard & Poor’s 500 Index rose 0.6 percent at 4:12 p.m. in New York to extend its gain since Dec. 31 to 5.2 percent, poised for its best first quarter since 1998. The MSCI World Index of 23 developed nations’ stocks climbed for a third day, advancing 0.6 percent, and the MSCI Emerging Markets Index increased 1.2 percent. The S&P/GSCI Index of commodities rose 2.3 percent, the most since Feb. 16. Crude rallied 2.7 percent.

Government data showed consumer spending in the U.S. rose in February for a fifth straight month and a jobs report on April 2 may show the largest increase in employment in three years. The European Union reported improvement in business and consumer confidence. Greece plans to sell 5 billion euros of seven-year bonds, its first offering since EU leaders and the International Monetary Fund pledged to help the nation finance its budget deficit.

“Given our trading background and approaches, we are impressed with the resilience of the market which, in effect, is what trading desks mean when they say the market ‘acts well,’” according to the report Birinyi sent to clients today. “Large stocks are now likely to be contributors rather than detractors.”

The S&P 500 traded at the lowest valuation compared with junk bonds in two years as of the end of last week, a sign the stock-market rally will continue, if two decades of history are any guide.

The Shanghai Composite Index jumped 2.1 percent, the most in more than seven weeks, while Taiwan’s Taiex index climbed 0.9 percent. China Resources Land Ltd. and China Construction Bank Corp. advanced after reporting higher profits. Stocks rose even after Stern Hu, the Australian executive who headed Rio Tinto’s iron ore business in China, was sentenced to 10 years in jail by a court in Shanghai after being found guilty of taking bribes and infringing commercial secrets.

The Micex index climbed 1.7 percent for the biggest gain since March 5 even after suicide bombers killed at least 38 people in the deadliest terrorist attacks in Moscow since 2004.

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