Stock markets in London and New York are surging to new highs on the back of a bull market.
The Dow Jones Industrial Average has sprinted past 25,000 for the first time stimulated by global economic growth and an unwillingness by central banks to pull the plug on monetary stimulus.
Meanwhile the London FTSE is trading at around 7,696 after peaking at 7,701 earlier in the day and falling back.
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The FTSE saw a 7.6% gain during 2017, while the Dow soared by 27%.
President Donald Trump’s tax reforms that seem to favour businesses may do more to boost the price of stocks and shares on Wall Street in the coming months.
Brexit damages economy
Brexit is damaging the economy, even though growth and stock prices have far exceeded the doom-laden predictions of doubters.
Uncertainty surrounding Britain’s economic outlook has made the country the “ugly duckling of the major markets”, says Mike Bell, global market strategist at JP Morgan Asset Management.
“In the US, Europe and even Japan, there is a clear picture that the economies are doing really quite well. Business investment is strong, consumer confidence is high and growth is likely for the next six months to remain pretty good,” he said.
Indeed, the FTSE started the year on a down for the only the fifth time in 15 years.
In the past, the January 1 movement has set the tone for the year for investors. If the first days sees a dip, the market closes the year down and vice versa.
Downbeat start to year
Richard Stone, chief executive of The Share Centre, said: “That the market has started 2018 on a downbeat note is not entirely surprising given the surge to record highs that we witnessed at the end of 2017.
“While the adage holds that past performance is not a guide to future performance, for 13 of the last 15 years the market has followed its first day movement for the year.
“Although we expect that positive global growth and accommodating monetary and fiscal policies will help support equities in 2018, the machinations of the Brexit negotiations and broader global political uncertainties will likely drive greater market volatility in 2018 than we saw in 2017.”