Shares climb to two-month high, dollar rises ahead of Trump speech

World stocks raced to a fresh two-month high on Tuesday to keep up their fast start to 2019 while the U.S. dollar strengthened for a fourth straight session as investors looked toward an annual address by the U.S. president later in the day.

With European shares rising sharply, MSCI’s gauge of stocks across the globe gained 0.44 percent, increasing for a sixth straight session as it hit a two-month high. Wall Street’s main indexes were modestly higher in afternoon trade, paring stronger initial gains.

President Donald Trump was due to give his State of the Union speech at 2100 ET (0200 GMT), with investors awaiting indications of progress in U.S.-China trade talks and watching for signs of tensions with Democrats following a 35-day partial federal government shutdown.

The Federal Reserve’s dovish recent statement on interest rate policy, along with optimism over U.S.-China tensions, has fuelled recent risk appetite, even as estimates for U.S. corporate earnings have been falling.

Despite the State of the Union tonight, investors seem increasingly certain that we are going to avoid any escalation of the trade tensions with China and avoid another government shutdown,” said Jeffrey Kleintop, chief global investment strategist at Charles Schwab in Boston.

Investors are viewing policy considerations offsetting falling earnings expectations,” Kleintop said.

On Wall Street, the Dow Jones Industrial Average rose 99.25 points, or 0.39 percent, to 25,338.62, the S&P 500 gained 2.88 points, or 0.11 percent, to 2,727.75 and the Nasdaq Composite added 24.91 points, or 0.34 percent, to 7,372.44.

Shares of Estée Lauder Cos and Ralph Lauren reacted favourably to the companies’ respective quarterly reports.

Fourth-quarter earnings for companies on the benchmark S&P 500 index were on track to have climbed 15.8 percent, but profit in the first quarter is now expected to rise by only 0.4 percent, according

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