The global stock rally extended into Tuesday following a rally on Monday on Wall Street spurned by centrist Emmanuel Macron’s electoral win in France over the weekend. Japan’s Nikkei 225 gained 0.8 percent by midday to hit 19,034.74, the first cross of the 19,000 level in three weeks. The Shanghai composite was up 0.42 percent and the Kospi up 0.68 percent, while the Hang Seng index gained 0.94 percent thus far on Tuesday.
Both the dollar and the euro gained against the yen on Tuesday morning, with the dollar up nearly 0.3 percent to 110.04 yen and he euro up to 119.55 yen.
Despite the Rally, Tensions Reign
The U.S. stock rally surprised some investors as President Trump’s approval ratings continue to decline and he struggles to beat the clock that requires him to pass a spending bill through September by Friday, or risk a government shutdown over the weekend. Senate Democratic leader Chuck Schumer commented on Monday that the negotiations for the spending bill were progressing nicely until the White House demanded funding for the separation wall between the U.S. and Mexico as part of the spending bill. 60 members of the 100-member Senate are required to vote in favor of the spending bill in order for it to pass, and with only 52 Republicans in the Senate, this means at least a few opponents will have to vote in favor of the bill, or hundreds of thousands of U.S. government workers will be temporarily “firedâ€, causing a major halt in all non-essential work.
Despite the opposition Trump continues to maintain that the border wall is essential to combat the war on drugs. On Monday he posted on Twitter: “If… the wall is not built, which it will be, the drug situation will never be fixed the way it should be!†At this point the White House has not commented on whether it will approve a spending bill that does not include money for the border wall, leaving traders and political analysts wondering whether things will progress as needed by the end of the week.
