Stocks headed toward their highest level in almost a month as a rally in metals lifted commodity producers from BHP Billiton Ltd. to Anglo American Plc. Oil fluctuated.
The MSCI All Country World Index extended this month’s advance, the Dow Jones Industrial Average topped 19,000 for the first time and emerging-market shares surged. Gold headed for its first back-to-back increase since Donald Trump’s election while copper paced gains in metals. Oil traded near $48 a barrel as OPEC members sought to reach a deal on output cuts. European bonds rallied on bets policy makers will extend their stimulus program.
Equities rose on speculation the world’s largest economy is strong enough to withstand higher borrowing costs. The market-implied odds of a Federal Reserve hike in December reached 100 percent, according to Bloomberg calculations based on futures. A rate increase “could well become appropriate relatively soon,” Fed Chair Janet Yellen said last week. The fresh stock highs also came as American companies ended a five-quarter profit slump.
“We’ve finally broken through to new records,” said Heinz-Gerd Sonnenschein, an equity strategist at Deutsche Postbank AG in Bonn, Germany. “We can move on to pricing in the improving outlook: there are strong signs that the U.S. economy is in good shape and that bodes well for corporate earnings.”
Sales of previously owned U.S. homes unexpectedly climbed in October to the highest level since February 2007, a sign of momentum in the housing market a month before a jump in borrowing costs, National Association of Realtors data showed Tuesday. Reports on new home sales, durable goods and manufacturing are due Wednesday, as well as minutes from this month’s Fed meeting. U.S. markets will be closed Thursday for the Thanksgiving holiday.