World equity markets were poised for a fifth week of gains on Friday, their best run in more than two years, as a 2016 high for oil, the dollar’s recent decline and a more optimistic view of the economy combined to boost investor confidence.
Stocks in Europe gained and Wall Street rose for a third day as the dollar steadied after a third week of declines that took it to its lowest against other major currencies .DXY since October.
The dollar had weakened earlier in the week after the U.S. Federal Reserve scaled back its forecasts for rate increases. On Friday, the European Central Bank’s chief economist, Peter Praet, indicated the ECB could further loosen monetary policy.
A rising dollar in 2015 weighed on the global economy while its recent decline has helped push up oil prices and put an end to market concerns over a soaring dollar and weak oil prices, said David Kelly, chief market strategist at JPMorgan Asset Management in New York.
“People have woken from a nightmare,” Kelly said, referring to market turmoil in January and February. Given how low bond and cash yields are, it’s hard not to buy stocks, he said.
“To me the anomaly here is not that the economy isn’t doing well, it’s that bond valuations are priced for a depression,” he said.
MSCI’s all-country world index .MIWD00000PUS, a gauge of equity performance in 46 countries, rose 0.21 percent. The index is set for its best five-week rally since early 2014. Read more