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A trader wearing a Santa Claus hat celebrates during a last day of trading inside a Philippine Stock Exchange at the financial district of Makati city, metro Manila Dec. 27, 2013. (Romeo Ranoco/Reuters)
A trader wearing a Santa Claus hat celebrates during a last day of trading inside a Philippine Stock Exchange at the financial district of Makati city, metro Manila Dec. 27, 2013. (Romeo Ranoco/Reuters)

Before the bell: Global stocks extend rally Add to ...

The year-end rally in global stocks is showing little sign of exhaustion on Friday, even as U.S. bond yields move higher.

In Europe, the U.K.’s FTSE 100 rose 0.7 per cent and Germany’s DAX index rose 0.8 per cent. In Asia, Japan’s Nikkei 225 was relatively unchanged.

And U.S. stock index futures were flat. Futures for the Dow Jones industrial average were up just 6 points with less than two hours before markets open for trading. Futures for the broader S&P 500 were unchanged.

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So, while there are no bullish fireworks, there’s no retrenchment either. And that should come as an upbeat signal, given that the yield on the 10-year U.S. Treasury bond has moved above 3 per cent for the first time in more than two years.

The last time the yield was close to 3 per cent, in September, the market – and the U.S. Federal Reserve – was concerned about the impact on borrowing costs and, ultimately, spending. This time, it is seen as a healthy indication of an improving economy and reduced need for Fed stimulus.

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