Overnight in the US, the S&P 500 closed at a new record high of 2,510. Investors are excited about potential tax reform being implemented by President Donald Trump, among other things.
Equities in Asia mostly chased the US higher with Hong Kong's Hang Seng index closing 0.5% higher this morning at 27,554. The SSE Composite in China rose 0.3% at 3,348.
Here in the UK the important FTSE 100 index is closing the week on a high, up around 45 points at 7,367, give or take. That's just 3% off near-7,600 records set in June.
But is this sustainable?
PRESSURE IS ON
In our latest main feature, Shares lays out the important pressure points, such as the impact of the pound on corporate earnings, consumer debt levels and other factors.
We also talk with a number of investment experts, gauging their opinions on what investors should do now.
Given the fact that UK stock markets are heavily influenced by what's going on on Wall Street, let's turn back to the S&P.
LOOKING ACROSS THE POND FOR DIRECTION
According to Fidelity Multi Asset Open Range portfolio manager Bill McQuaker, the S&P has already achieved a 34 record highs in 2017, but he is uncertain that this will continue.
In the year to date, the S&P 500 has returned over 25% compared to the broad market return of approximately 11% thanks to strong sentiment in tech giants such as Amazon and Apple.
‘If expectations around technology disappoint or competition authorities look more closely at the sector, the hype could disappear quickly’ warns McQuaker.
VALUE IN UNLOVED COMPANIES
The portfolio manager believes investors should look to the underdogs over the last couple of months.
‘If the equity market continues to do well or if growth surprises to the upside, then this year’s laggards should have their day in the sun’ says McQuaker.
In tough times, he argues investors will be likely to sell what they are overweight in, which is likely to be technology stocks in the current global markets.
