Markets hover near all-time high despite latest tariffs drama
In Europe, shares in Germany's DAX index hit a record high after the new coalition government there approved a €46bn package of corporate tax breaks as part of a push to revive economic growth, and ahead of an expected interest rate cut on Thursday from the European Central Bank.
The Stoxx Europe 600 Index of European shares closed up 0.5pc after it pared some earlier gains following weaker-than-expected US jobs data.
European shares are increasingly outperforming the US, closing what had been a yawning valuations gap.
US stocks are close to their own highs, having recouped the 20pc suffered in April during the initial phase of the reaction to Donal Trump's tariffs.
While the White House has rowed back on its most extreme tariff policies, it did pull the trigger on Wednesday on a huge 50pc tariff on imports of steel and aluminium, double the size of a tariff first announced in February.
The steel levy, imposed for supposed national security reasons, is outside the scope of a US court that last week ruled much of the Trump tariff regime was illegal.
The decision to push ahead with the higher rate came after the White House was stung by the new insult that Trump always chickens out (TACO).
Canada, the biggest exporter of steel to plants including in the US industrial belt close to the border, will be worst hit.
The MSCI index made up of a basket of stocks from across the developed world – and therefore a good guide to confidence in the global economy – touched an all-time high on Monday and remained close to it on Wednesday.
In Dublin, the Iseq 20 index of Irish shares hit a high on May 29, and remains close to it. The numbers point to investors increasingly looking through the tariff threat, despite the noisy policy shifts, at least until next month when a number of 90-day tariff 'pauses' are due to roll off.
Talks – including between the EU and US, Canada and the US, and the US and China – all aimed at influencing the July deadlines are currently taking place.
'As the market continues to move higher, I think investors are simply saying look, the trend is your friend, and just like white-water rafting they will let the market take them where it wants to go,' said Sam Stovall, chief investment strategist of CFRA Research in New York.
'The markets are going through some sideways movement until we get into July because then we'll have a better read on what kind of an impact tariffs have had on Q2 economic growth and earnings, and give a better idea as to what might happen for the remainder of this year.'
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