World stocks hit record highs as Dow keeps rising - as it happened

All the day's economic and financial news, as shares continue to hit new peaks before coming off the boil in late trading

• Introduction: MSCI World Index hits new high this morning
• Latest: Dow Jones hits another closing high
• Trump-Russia worries alarm some traders
• VIX fear index hits two-week high
• Economic optimism and rising inflation push shares up
• US factory survey surges to 33-year high
• Are shares overvalued? Maybe....

9.16pm GMT

That's all for today, after a lively session that saw MSCI's all-country index hit record highs this morning.

But with Europe ending lower, and a mixed close on Wall Street, the rally may be taking a breather.

Thursday
S&P:
Dow: All-Time High
Nasdaq:
MidCaps:
Russell 2k:
NYSE:
Too much winning is tiresome, all back to new highs tomorrow. pic.twitter.com/NVY4jrn8ow

9.08pm GMT

DING DING! The closing bell has rung on Wall Street, and the Dow Jones industrial average has hit a new closing high for the 6th day running.

But it's only a small move - the Dow ended the day up 7 points, or a meagre 0.04% at 20,619 points.

#BREAKING News: #Dow ends at a new record high for the 6th straight day. https://t.co/omWdY5oTSv pic.twitter.com/4IRQFVE87E

#Stocks end the session not far from where they started -- Dow squeezes out another record but the S&P, Nasdaq snap a 7-day win streak. pic.twitter.com/oKfUskgeIW

8.12pm GMT

With less than an hour's trading to go, the Dow is down a modest 13 points or 0.06%.

Energy firms, such as Exxon Mobil and Chevron, and financial stocks such as Goldman Sachs have lost ground.

7.48pm GMT

After a run of strong gains, the US dollar has dropped back today - suffering its biggest drop in two weeks.

Currency traders are having second thoughts about the chances of an interest rate hike in March.

7.33pm GMT

Here's a couple of shots from the New York stock exchange, as traders watched the Dow Jones, the S&P 500 and the Nasdaq hit new alltime highs.

6.42pm GMT

Traders are keeping a close eye on the famous Wall Street 'fear index after it a two-week high today.

The CBOE volatility index, or VIX, is now at its highest level since the end of January, following an 11% surge yesterday. That's a sign that investors are somewhat jittery about the solidity of the market rally.

6.33pm GMT

Shares have been driven high in recent weeks by Donald Trump's promise of a 'phenomenal' tax reform plan.

However, we still don't have any details...and that is starting to worry some investors.

"Some of these policies are game changers to certain sectors, and the market is being somewhat rational in terms of taking a bit of a breather before we have more facts as opposed to plans or intention.

Trump: 'Russia is fake news' https://t.co/AFfQuXRrNr pic.twitter.com/bjqUGAHQtL

Hours after saying that the Dow was booming due to US 'confidence + optimism',@realDonaldTrump says 'I inherited a mess' in live presser

6.16pm GMT

Our economics editor, Larry Elliott, fears that the market boom will turn sour, eventually.

He writes:

For the time being, Wall Street is being supported by negative real interest rates and the prospect of tax cuts to come. That means stock market records will continue to be broken over the months ahead.

Until the moment comes when traders get spooked by rising interest rates, burgeoning budget deficits, protectionism or a combination of all three. Wall Street is getting intoxicated on irrational exuberance. But remember: the wilder the party, the bigger the hangover.

6.09pm GMT

Hello again. European stock markets have ended the day slightly in the red, after helping to push global equities to record highs this morning.

In London the FTSE 100 finished down 24 points, thanks to some big names going ex-dividend, and drops in mining companies.

Growing concerns about contact between President Trump's team and Russia ahead of last November's election has tempered the rally in global stock markets today, with the FTSE dropping back a little. A drop in the US dollar is a sign that markets are growing increasingly worried over whether any notable link can be found between Russian intelligence agencies and the Trump campaign team.

3.11pm GMT

ABN Amro's chief investment officer Didier Duret, says markets are being driven higher by recent solid economic data:

With the exception of politics, I have rarely seen such a network of positive signals.

"There is a momentum, we don't know when it will stop, but at the moment it is strong. Investors are rather underinvested anyway and there is lots of cash so equities are the asset class of default in this environment."

2.42pm GMT

NEWSFLASH: The US stock market has hit fresh highs at the start of trading in New York.

The Dow Jones industrial average, the S&P 500 and the Nasdaq have all moved higher, as the rally that has driven global markets to new heights continues.

2.38pm GMT

A reader has got in touch about this morning's reference to 'animal spirits driving the markets'.

It's a phrase popularised by John Maynard Keynes, who wrote about how optimism, rather than deep-rooted analysis, drives many of our decisions.

Most, probably, of our decisions to do something positive, the full consequences of which will be drawn out over many days to come, can only be taken as the result of animal spirits-a spontaneous urge to action rather than inaction, and not as the outcome of a weighted average of quantitative benefits multiplied by quantitative probabilities.

Global stocks pull back from record highs https://t.co/irPFB0vjQw pic.twitter.com/M4JKceokzc

2.21pm GMT

Although the surge in the Philadelphia Fed factory index to a 33-year high is impressive, it isn't enough to make the US economy great again on its own.

Paul Ashworth, chief US economist at Capital Economics, explains why:

We do expect to see an acceleration in manufacturing output and employment growth this year but, just as we didn't think that the downturn in 2015 and 2016 would plunge the wider economy into recession, we don't expect this revival to spill over into much faster GDP growth. Manufacturing is simply too small a part of the overall economy now.

2.06pm GMT

Boom! Factories in the Philadelphia area are growing at their fastest rate in three decades.

That's according to new research from the Federal Reserve Bank of Philadelphia, which provides fresh evidence that America's economy is strengthening.

Philly Fed index jumps to 43.3 from 23.3, highest since Jan 1984. Was expected to fall to 18.0. pic.twitter.com/wCQS8dom9A

Regional US factory gauge surges to the highest level in more than 30 years. https://t.co/NNmig12jpj pic.twitter.com/uYMYhVkIHr

1.58pm GMT

The latest US unemployment data also looks pretty decent.

Some 239,000 people filed new 'initial claims' to receive jobless benefit last week, up from 234,000, but less than expected.

Initial jobless claims have been lower than 240,00 five of the last seven weeks.

They didn't go below 240,000 once btw Dec 1973 & Dec 2016

Starts and permits crush estimtes, claims come in <240k...very good econ data this morning.

1.52pm GMT

Just in: The number of permits being granted to build a house in America has hit a 14-month high.

U.S. housing starts exceed estimates after a stronger December https://t.co/ZbEPyZ8NTj pic.twitter.com/VS9F0IPU9Q

1.19pm GMT

I'm afraid Donald Trump's upbeat tweet about the stock market hitting its 'longest winning streak in decades' may be a bit of Fake News.

Strictly speaking, the three main US stock market benchmarks have all hit record highs for five days in a row -- the first time this has happened in 25 years.

In terms of winning streaks, the S&P has risen for seven consecutive trading days for its longest stretch of up days since September 2013, when it also rose for seven straight sessions. That's according to Dow Jones data.

The Dow has gained for five straight days, its best stretch since December, and the Nasdaq has been up for seven sessions in a row, its best streak since its seven-session advance that ended Jan. 11.

Er, no. Longest winning streak (daily) since:
July 2013 (S&P)
Dec 2016 (Dow)
Last month (Nasdaq)

(Weekly)
July (S&P)
Dec (Dow)
Aug (Nasdaq) https://t.co/dR3BUrUi9b

12.47pm GMT

The European Central Bank has just broken the news drought by releasing the minutes of January's meeting.

They show that policymakers were keen to remain 'patient' and not tighten monetary policy too fast.

The Governing Council was seen as well advised to remain patient and maintain a 'steady hand' to provide stability and predictability in an environment still characterised by a high level of uncertainty.

The recent increases in energy prices had thus far not translated into indirect or second-round effects on broader inflation."

So ECB says no underlying conviction in upward trend for inflation - hmmm - really? #euro pic.twitter.com/YkgmhzMITE

12.12pm GMT

Away from the markets...the president of General Motors has arrived in Westminster for talks with the UK government.

On the agenda: GM's plan to sell its Vauxhall division, which employs 4,500 people in Britain, to France's PSA Group.

President of @GM arrives at @beisgovuk. @unitetheunion wants government to help @vauxhall with a Brexit deal in same way it helped @Nissan. pic.twitter.com/9vRIiQjtGv

11.43am GMT

Look who wants to take the credit for the market rally.....

Stock market hits new high with longest winning streak in decades. Great level of confidence and optimism - even before tax plan rollout!

Trump on twitter claiming credit for "longest winning streak in decades" for the stock market

11.32am GMT

Here's a chart showing how business activity and raw materials prices have both risen in recent months, hinting at stronger growth....

Signs of a global rebound (1); chart from Albert Edwards of SocGen pic.twitter.com/WYbiBoU6Yr

Signs of a global rebound (2); inflation surprising on the upside. Chart from BAML pic.twitter.com/FOdD8BJD3J

11.07am GMT

Currency traders are taking a break from worrying about Brexit, says Jane Foley of Rabobank.

But once Britain actually triggers Article 50, to begin the exit process from the EU, the pound may come under more pressure again.

Once the talks start properly the full complexity of the situation will become a lot more obvious....

Sterling will be up for a rocky ride at the very best."

10.53am GMT

Much of the FTSE 100's weakness this morning is due to some major companies going 'ex-dividend' (meaning shareholders no longer quality for the next payout).

Chris Beauchamp of IG explains:

The FTSE 100 is trading modestly lower this morning, but most of these losses can be explained away by a number of big names going ex-dividend. BP, Shell, AstraZeneca and Imperial Brands are all trading without the benefit of the dividend, and with these heavyweights in the red it is going to be tough for the market to push higher.

Given the steady rally we have seen over the past week or more, however, some weakness is to be welcomed, taking a little heat out of the market. For now, the bulls remain unconcerned.

9.56am GMT

Having hit a one-month high yesterday, London's stock market is slightly spoiling today's narrative by dipping in early trading.

Mining companies and oil producers are falling, pulling the FTSE 100 down by 30 points to 7272.

9.28am GMT

Global stocks are now worryingly high, according to one well-respected measure that compares the price of shares with company earnings.

The Cyclically Adjusted price/earnings ratio (CAPE), formulated by economist Robert Shiller, is now almost 29; close to its level before the Black Tuesday crash of 1929.

Very few experts may disagree that valuations are overstretched, and that investors are willing to pay more premium on prospects of aggressive fiscal plans.

We can even go further to discuss that bubbles are being formed, and Professor Robert Shiller's CAPE PE ratio supports this opinion as it approaches 29. However, bubbles may grow bigger, even much bigger before they burst, if animal spirits continue to drive the rally.

9.06am GMT

Kathleen Brooks, research director at City Index, reckons that the rally has further to run -- despite concerns that valuations have risen too high.

US equity indices posted fresh record highs on Wednesday, and the FTSE 100 is less than 50 points away from its record 7,354 level reached in mid-January. The lead indicators for the markets, including the Dow Jones Transportation Index and the Russell 2000 also scaled to fresh heights, suggesting that this rally is here to stay, even as some economists and analysts' rush to argue that markets are stretched, volumes are low and valuations are too high.

The Russian Ruble was one of the worst performers yesterday, this came after President Trump tweeted that President Obama was too soft on Russia over its invasion of Crimea. What about the Trump/ Putin bromance that has been blossoming and driving the ruble higher?

We doubt that it is over, and would imagine that relationship has a long way to run. But it's a keen reminder that President Trump, rather than valuation measures, are a bigger threat to the stock market rally.

World stocks hit fresh all-time highs. pic.twitter.com/6S0RPph2S7

8.55am GMT

There should be some red faces in the City over this stock market rally.

Many experts predicted that stocks would plunge if Donald Trump won the US election - instead, trillions has been wiped onto share values since November.

MSCI All-Country World Index hit a record. World equities have gained about $6tn since Trump election equals to combined GDP of Germany & UK pic.twitter.com/AJQEfyTdRi

8.41am GMT

Optimism over American economy is helping to drive markets to record levels, says the Financial Times.

The FT argues that hopes for faster economic growth has "galvanised markets from the US to Europe".

Wall Street has led the rally since Donald Trump captured the White House, hardening expectations that the US expansion will quicken just as the Japanese, Chinese and eurozone economies show signs of improvement.

8.28am GMT

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

World stock markets have hit their highest ever levels, as the bullish optimism rippling through global trading floor around the globe refuses to abate.

Quintet of record highs & record closes: Dow, S&P 500, Nasdaq, Russel 2000, Dow Transports (via Robert Hum @CNBC)

Related: Top Trump diplomacy: we rate the president's calls and calamities with world leaders

Whatever political problems President Trump maybe having on the staffing front with resignations and the like financial markets remain largely ambivalent, choosing to focus on last week's promise to deliver something "phenomenal" in a couple of weeks' time, as US markets hit new record highs for the fifth day in a row, driven by banks and financials.

Both Goldman Sachs and JP Morgan shares have hit record levels, with the financial sector up 22% since the 8^th November, while here in the UK the FTSE250 has also managed to post record highs five days in succession, as UK stocks appear to be becoming a haven from political concerns in Europe.