The S&P 500 and the Nasdaq Composite notched record closing highs on Tuesday, the first trading day of 2018, while European equities finished lower and the US dollar fell to its weakest level in over three months against key currencies.
MSCI's gauge of stocks across the globe gained 0.74 per cent. In 2017 the index set scores of record highs and rose by one-fifth in value.
Major stock indexes closed 2017 with their best performance since 2013. In the US market, the advance came amid strong economic growth and corporate earnings, low interest rates and hopes, now realised, of US corporate tax cuts.
The US equity indexes closed higher on Tuesday, buoyed by gains in technology and consumer discretionary stocks.
The Dow Jones Industrial Average rose 104.79 points, or 0.42 per cent, to 24,824.01, the S&P 500 gained 22.18 points, or 0.83 per cent, to 2,695.79, and the Nasdaq Composite added 103.51 points, or 1.5 per cent, to 7,006.90.
"We're off to the races once again," said Stephen Massocca, senior vice president at Wedbush Securities in San Francisco.
"I don't expect the kind of moves we saw last year," he said. "But as long as monetary policy stays the way it is ... my view is stocks are going to have a decent year. And fiscal policy has become stimulative as well given the tax bill."
In Europe, equities closed lower, weighed by a decline in autos stocks following weaker car registrations data. Trading was also cautious ahead of the launch of a major reform of European financial markets.
The pan-European STOXX 600 index fell 0.21 per cent, and euro zone stocks shed 0.19 per cent.
Shares rose in Asia. Shanghai blue chips climbed 1.41 per cent and MSCI's 24-country emerging market stock index jumped to a multi-year high after the Caixin index of Chinese industry rose to a four-month high of 51.5 in December, confounding forecasts for a decline. The 50-mark divides expansion from contraction.
The dollar index, which tracks the greenback against a basket of major currencies, fell 0.29 per cent, hampered by expectations of a slower pace of interest rate increases by the Federal Reserve amid a tepid US inflation picture.
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The dollar hit a three-month low on Friday, bringing its losses for 2017 to 9.8 per cent, its worst performance since 2003.
Other currencies gained. The euro rose 0.39 per cent to $1.2055 and hit a four-month high on Tuesday after data showed that euro zone manufacturers ramped up activity last month at the fastest pace in more than two decades.
The Japanese yen strengthened 0.32 per cent at 112.29 per dollar, while sterling was last trading at $1.3594, up 0.69 per cent.
U.S. Treasury yields rose in line with European government yields. A European Central Bank official said the ECB's massive bond purchase program might not continue later this year.
A reversal of year-end buying has also driven U.S. Treasury yields higher, said Brian Rehling, co-head of global fixed income strategy for Wells Fargo Investment Institute in St. Louis.
"Lots of institutions buy Treasuries to hold over year-end for liquidity. To see that reversal early in the year is not a surprise," Mr Rehling said.
Benchmark US 10-year notes last fell 14/32 in price to yield 2.4597 per cent, from 2.411 per cent late on Friday.
Oil prices earlier enjoyed their strongest start to a year since 2014 but fell lower as major pipelines in Libya and Britain's North Sea restarted and US production soared to the highest level in more than four decades.
US crude last fell 0.1 per cent to $60.36 per barrel and Brent was at $66.53, down 0.51 per cent.
Copper lost 0.42 per cent to $7,216.50 a tonne, following a rise of 31 per cent in 2017 to a four-year top.
Spot gold added 1.2 per cent to $1,317.69 an ounce, after advancing by 13 per cent in 2017 for its best performance in seven years.
India squad
Virat Kohli (captain), Rohit Sharma, Mayank Agarwal, K.L. Rahul, Shreyas Iyer, Manish Pandey, Rishabh Pant, Shivam Dube, Kedar Jadhav, Ravindra Jadeja, Yuzvendra Chahal, Kuldeep Yadav, Deepak Chahar, Mohammed Shami, Shardul Thakur.
Gifts exchanged
- King Charles - replica of President Eisenhower Sword
- Queen Camilla - Tiffany & Co vintage 18-carat gold, diamond and ruby flower brooch
- Donald Trump - hand-bound leather book with Declaration of Independence
- Melania Trump - personalised Anya Hindmarch handbag
MATCH INFO
Jersey 147 (20 overs)
UAE 112 (19.2 overs)
Jersey win by 35 runs
UAE currency: the story behind the money in your pockets
The specs: 2018 Ford Mustang GT
Price, base / as tested: Dh204,750 / Dh241,500
Engine: 5.0-litre V8
Gearbox: 10-speed automatic
Power: 460hp @ 7,000rpm
Torque: 569Nm @ 4,600rpm
Fuel economy, combined: 10.3L / 100km
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
PROFILE
Name: Enhance Fitness
Year started: 2018
Based: UAE
Employees: 200
Amount raised: $3m
Investors: Global Ventures and angel investors
THREE
%3Cp%3EDirector%3A%20Nayla%20Al%20Khaja%3C%2Fp%3E%0A%3Cp%3EStarring%3A%20Jefferson%20Hall%2C%20Faten%20Ahmed%2C%20Noura%20Alabed%2C%20Saud%20Alzarooni%3C%2Fp%3E%0A%3Cp%3ERating%3A%203.5%2F5%3C%2Fp%3E%0A
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
World Cricket League Division 2
In Windhoek, Namibia - Top two teams qualify for the World Cup Qualifier in Zimbabwe, which starts on March 4.
UAE fixtures
Thursday February 8, v Kenya; Friday February 9, v Canada; Sunday February 11, v Nepal; Monday February 12, v Oman; Wednesday February 14, v Namibia; Thursday February 15, final
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
