(Adds gold, oil settlement prices)
* Abe resigns on health grounds; yen jumps
* Investors say lack of detail on Fed policy shift
* U.S. oil prices little moved by massive storm
* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
By Herbert Lash
NEW YORK, Aug 28 (Reuters) - Global equity markets rose to a
new high on Friday as U.S. consumer spending in July suggested a
strong economic rebound lies ahead, while the Japanese yen
surged on safe-haven buying after Prime Minister Shinzo Abe
resigned for health reasons.
The dollar approached lows last seen in May 2018, retreating
from Thursday when the Federal Reserve set forth a new stance on
inflation that will allow it to run a bit hot and reinforced
expectations of a prolonged low interest-rate environment.
Longer-term yields fell and gold rose more than 2% as
investors sought a store of value in the face of higher
inflation and real rates that are negative.
U.S. consumer spending increased more than expected last
month, raising expectations for a sharp rebound in growth in the
third quarter, though momentum could ebb as the COVID-19
pandemic lingers and fiscal stimulus dries up. L1N2FU0Z3
A U.S. Commerce Department report also showed a rise in
personal income after two straight monthly declines, while
monthly inflation pushed higher.
"There's a big bounce on Main Street, the economic data
every day on Main Street is bouncing higher," said Jim Paulsen,
chief investment strategist at Leuthold Group in Minneapolis.
People are getting more optimistic about the economy but
underneath that is a healthy dose of caution as "Main Street is
still a mess," he said.
"As the market keeps going up, more and more of them are
reducing their bearish bets a little bit and putting more into
stocks, which is helping drive the market higher," he said.
MSCI's benchmark for global equity markets .MIWD00000PUS
rose 0.43% to 585.73 after earlier setting a new intraday high,
while stocks on Wall Street also rallied, with technology
leading the way and the Dow close to an all-time high.
The Dow Jones Industrial Average .DJI rose 0.54%, the S&P
500 .SPX gained 0.45% and the tech-laden Nasdaq Composite
.IXIC added 0.49%.
"A lot of this is momentum. It's just fear of being left
behind, fear of missing out," said Tim Ghriskey, chief
investment strategist at Inverness Counsel in New York.
"Value has been outperforming growth and you're seeing that
reverse today. When growth underperforms for a period of days,
it tends to rebound very sharply. We're seeing that in market
preferences today."
Information technology .SPLRCT rose 0.9% and accounted for
about half of the S&P 500's gain.
In Europe, stocks slipped as investors dumped this year's
outperformers, including technology and healthcare stocks, and
bid up banking shares after the Fed unveiled its new policy
framework.
The broad pan-regional FTSEurofirst 300 index .FTEU3 slid
0.50% to close at 1,429.82.
In Japan, the benchmark Nikkei 225 .N225 share index
closed down 1.4% while the yen JPY= , seen as a safe-haven
currency to buy in times of uncertainty, strengthened 1.03%
versus the greenback at 105.46 per dollar.
The yen was on course for its biggest one-day jump since
March, when the coronavirus pandemic roiled global markets.
There has been speculation about Abe's health all week but
the resignation of Japan's longest-serving premier rattled
investors, given he has spearheaded efforts to revive growth
through his reflationary "Abenomics" policies. Some analysts said the yen's rally seemed excessive given
Abe's successor was unlikely to alter economic policy
significantly because Japan remains in the middle of a battle to
avoid deflation and lift growth.
"You're seeing yen strength on a little bit of uncertainty,"
said Lou Brien, strategist at DRW Trading in Chicago. "Abenomics
has been one of the more influential economic strategies."
The dollar index =USD fell 0.657%, while the euro EUR=
rose 0.53% to $1.1884.
The yield on the 10-year U.S. Treasury US10YT=RR note
pared losses to trade down 1.3 basis points to 0.7326%.
Investors are rebalancing intermediate-dated debt following
large auctions earlier this week.
U.S. Treasury auctions of roughly $150 billion worth of
three-year, five-year and seven-year notes received strong
demand starting on Tuesday. The decline in yields on each of
those instruments on Friday likely reflected traders
repositioning, said Subadra Rajappa, head of U.S. rates strategy
for Societe Generale.
German bond yields briefly rose to their highest since
early June after the Fed's decision to target average inflation.
Oil prices slid a notch after Hurricane Laura passed the
heart of the U.S. oil industry in Louisiana and Texas without
causing widespread damage and companies began to restart
operations.
Brent crude futures LCOc1 settled down 4 cents at $45.05 a
barrel and U.S. crude futures CLc1 slipped 7 cents to settle
at $42.97 a barrel.
U.S. gold futures GCv1 settled up 2.2% at 1,974.90 an
ounce.
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Japanese markets react to Abe resignation https://tmsnrt.rs/3gztlNa
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