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Positive earnings results drive US markets higher

Positive earnings results drive US markets higher

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The Dow recovered nearly all of last week’s losses on Monday as it gained 0.9% to close at 20,636 points. While the CBOE Volatility Index (VIX) only pulled back slightly to remain close to last week’s five month high, investors appeared to set aside concerns regarding geopolitical issues to focus on some promising earnings results, particularly in the financial sector.

On the score of potential external issues impacting the markets though, gold is another indicator of risk sentiment and it hit an intraday high of US$1297 per ounce before closing at US$1286 per ounce.

While the precious metal hit an intraday high of US$1337 per ounce as the presidential election unfolded, it closed at US$1277 per ounce on that day, indicating Monday’s close was comparatively high.

Back to equities markets though, it was all about financials and there were strong performances from JP Morgan Chase, American Express and Goldman Sachs. Outside the financial sector, there was also good support for Boeing and Nike.

Tech stocks also made a comeback with the NASDAQ surging 0.9% to close at 5856 points, less than 1% shy of the psychological 5900 point mark.

UK markets and most European bourses were closed, including the London Metals Exchange.

However, as a guide to how other global markets are weighing up heightening geopolitical tensions, trading in China and Japan on Monday provided some insight.

In Japan, the Nikkei 225 spent most of the session in negative territory, and it was down more than 100 points at one stage before eking out a 0.1% gain in the last hour of trading.

The Hang Seng came off 0.2% to close at 24,261 points.

Iron ore slid another 2.4%, and it is now tracking in the vicinity of US$66 per tonne.

Oil gave up all of last week’s gains which saw it push up close to the US$54 per barrel mark to finish at US$52.75 per barrel on Monday.

The Australian dollar is fetching just shy of US$0.76.