While you were sleeping: Powell testimony spurs Wall St gains

Wednesday 29th November 2017

Wall Street climbed to record highs after Jerome Powell, US President Donald Trump’s nominee to succeed Federal Reserve Chair Janet Yellen, said financial rules are “tough enough.”

Powell made the comments in testimony at his Senate confirmation hearing in Washington, where he also firmed bets that the Fed will lift interest rates next month.

Meanwhile, US officials said North Korea fired unidentified ballistic missile, Reuters reported. North Korea fired a missile towards the east in the early hours of Wednesday morning, the Wall Street Journal reported, citing South Korean authorities.

In 1.31pm trading in New York, the Dow Jones Industrial Average climbed 0.7 percent, while the Nasdaq Composite Index added 0.2 percent. In 1.16pm trading, the Standard & Poor’s 500 Index gained 0.7 percent.

The Dow rose as gains in shares of JPMorgan Chase and those of Cisco, recently up 2.6 percent and 2 percent respectively, outweighed falls in shares of Apple and those of Nike, recently down 0.6 percent and 0.2 percent respectively.

“When you look at the financials as a group, they probably have a couple of tail winds—in terms of how [Powell] thinks about regulation and interest rates and certainly the progress being made so far on tax reform,” Art Hogan, chief market strategist at B Riley FBR in Boston, told Reuters.

The latest US economic data underpinned reasons for optimism about the outlook. A Conference Board report showed its consumer confidence index climbed more than expected in November, rising to the highest level in almost 17 years.

Shares of Buffalo Wild Wings shares jumped, trading 6.3 percent higher at US$155.63 as of 12.34pm in New York, after private equity firm Roark Capital Group, which owns Arby's and Cinnabon, has agreed to buy the restaurant chain for about US$2.4 billion,

Roark agreed to pay US$157 a share in cash and will also take on Buffalo Wild Wings' net debt, the companies said in a statement.

Roark is likely to focus first on improving Buffalo Wild Wings's food and operations, which should be easy fixes for a firm that's experienced in the restaurant industry, according to Michael Halen, an analyst at Bloomberg Intelligence.

"The last three years there have been a disaster—there's a lot of low-hanging fruit," he said.

In Europe, the Stoxx 600 Index ended the day with a 0.6 percent gain from the previous close. Germany’s DAX Index rose 0.5 percent, while France’s CAC 40 Index increased 0.6 percent, and the UK’s FTSE 100 Index rallied 1.4 percent.

British and EU negotiators have reached a deal over the so-called Brexit bill, opening the door to a potential breakthrough in the talks this December, the Telegraph reported.

Sources on both sides confirmed that an agreement-in-principle has now been reached over the EU’s demand for a 60 billion euro financial settlement ahead of a crucial lunch meeting next Monday between Theresa May and Jean-Claude Juncker, the European Commission president, according to the Telegraph.

Two sources confirmed that the terms were agreed at a meeting in Brussels late last week after intense back-channel discussions led by Oliver Robbins, the UK’s chief Brexit negotiator, the Telegraph reported.

(BusinessDesk)

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