Global stocks climbed as commodities gained and better-than-estimated earnings pointed to resilience in the economy. The yen slumped on speculation Prime Minister Shinzo Abe is contemplating so-called helicopter money to revive Japan.
Financial shares led the S&P 500 Index higher, as the equity benchmark extended its record for a fourth day. Emerging-market equities advanced for a sixth day. South Africa’s rand and Russia’s ruble were among the biggest gainers against the yen after a gauge of metal prices climbed and oil rebounded. The pound surged as the Bank of England kept interest rates unchanged in its first decision since the U.K. voted to leave the European Union.
A rally in global stocks has added more than $4 trillion to the value of equities worldwide since June 27 on speculation central banks in major economies will boost stimulus. Investors have also been encouraged as the earnings season is off to a strong start with companies including JPMorgan Chase & Co. and Alcoa Inc. in the U.S. beating estimates along with Daimler AG in Europe.
“A lot of fund managers are holding a lot of cash and they have to buy if markets go higher,” said Simon Wiersma, an Amsterdam-based investment manager at ING Bank NV, which manages 26 billion euros ($29 billion). “Earnings were far better than expected and it seems Brexit thoughts were too negative.”
The S&P 500 added 0.6 percent at 9:33 a.m. in New York, rising for a fifth straight day, the longest stretch since March. JPMorgan rose 2 percent, leading a rally in bank stocks. Analysts came into the second-quarter earning season predicting profits will drop by 5.7 percent at S&P 500 companies, which would make it the fifth straight quarterly decline, the longest since 2009.
The Stoxx Europe 600 Index rose 1 percent, paring its losses since Britain’s referendum on June 23. The U.K.’s benchmark FTSE 100 Index trimmed gains after the BOE’s decision to be up 0.3 percent.
A gauge of European banks rallied for the fifth time in six days. UniCredit SpA, the Italian lender that’s selling assets to boost capital, jumped after Citigroup Inc. advised investors to buy the stock.
The MSCI Emerging Markets Index added 1 percent in its longest winning streak since April. The gauge has jumped almost 9 percent in 2016 and trades at the highest valuation in more than a year. Meanwhile, the MSCI World Index of developed markets has gained about 2 percent in the period.
The yen weakened 1.3 percent to 105.8 per dollar, after earlier strengthening as much as 0.5 percent. Former Federal Reserve chief Bernanke met Japanese leaders in Tokyo this week after earlier in the year floating the idea of helicopter money, which involves the central bank directly funding government spending, with one of Abe’s key advisers.
The pound strengthened 1.2 percent to $1.3307. The BOE unexpectedly kept its key interest rate unchanged. While signaling more stimulus will come in August to aid the post-Brexit economy, they stopped short of detailing what those might be.
The rand climbed 1.8 percent against the dollar and the ruble gained 1 percent. Brazil’s real and South Korea’s won strengthened as well.
West Texas Intermediate crude oil rose 1.5 percent to $45.41 a barrel, after tumbling 4.4 percent on Wednesday as U.S. data showed crude stockpiles fell an eighth week, the longest declining streak since June 2015.
The LME Index of six base metals rose to the highest since Oct. 15 on Wednesday as nickel climbed on potential supply disruptions and copper advanced on speculation policy makers’ efforts to spur economic growth will boost demand for metals. Zinc and aluminum rose, while tin fell.
Gold for immediate delivery declined 1.5 percent to $1,322.83 an ounce, after gaining 0.7 percent in the last session.
Corn increased 2.7 percent in Chicago, climbing for a third day as forecasts for hot and dry weather in the U.S. Midwest raised concern crop yields will deteriorate.
Sovereign debt fell in the U.S., the U.K., Japan and Germany. The yield on U.S. Treasuries due in a decade rose seven basis points to 1.54 percent, while that on Japanese debt increased by two basis points to minus 0.27 percent. Yields climbed seven basis points in Germany to minus 0.02 percent.
U.K. bonds fell, sending the rate on 10-year gilts up eight basis points to 0.82 percent, while two-year yields rose five basis points to 0.16 percent.