European and US shares traded higher again overnight, in seeming defiance of every other market. Crude oil tumbled and industrial metals fell, but these moves had no impact on the stock markets mania for growth companies. The US dollar, bonds and gold all rose, but the support for safe haven investments didn’t slow the tech heavy Nasdaq, which traded more than 4% higher.
In another unusual development, share market index volatility rose with the index. These moves highlight a contradiction. Investors buying into the higher growth and cash flow stocks are presumably comfortable with the risks, yet the cost of that risk rose. Apple shares leapt more than 6% ahead of the release of the iPhone 12.
Crude oil prices tumbled as recent supply concerns eased. Hurricane Delta has passed, Norwegian oil workers are back, and Libya resumed production. The falls put both West Texas and Brent below longer run averages, which may spur further trader selling. General pressure on commodity prices saw higher beta currencies fall and the US dollar edge higher.
Asia Pacific shares are set to rise ahead of the expected mid-session release of China trade data for September. In constant currency terms exports are forecast to grow 10.0% (previous 9.5%) and imports to rise by 0.4% (previous -2.1%), largely due to a strengthening yuan.