The Dow Jones Industrial Average breached 20,000 for the first time in the market's history on Wednesday night, with local investors hoping an optimistic US corporate earnings season continues ahead of Australia's own half-year reporting period.
Concerns over US President Donald Trump's trade plans have subsided somewhat as investors focus again on the potential for lower taxes, more government spending and looser regulations.
Following the November 8 US election, shares have rallied strongly, prompting the second fastest-ever rise between 1000 points milestones in the Dow's 120-year history and is up 9.5 per cent, according to Reuters data.
As the US President moves to restrict open trade between the world's largest economy and its international partners, some have wondered whether the nine-year bull run in shares has overshot the market.
However, analysts point to the Dow Jones' pop above 20,000 points as an indicator of overall positive sentiment, meaning markets may have further to run.
"While the Dow hitting 20,000 is one of the least meaningful data points on my screen, it does suggest that the equity rally is pretty broad based," said Michael Purves, chief global strategist at Weeden & Co.
"What's important is that the Dow is going up."
While the Australian stock market was closed on Thursday, shares around the region also felt the buoyant mood coming out of the United States.
The Nikkei rose 1.6 per cent, the Hang Seng was up 1.4 per cent, while the New Zealand stock exchange climbed 0.9 per cent.
The US dollar, which has strengthened considerably since Trump's election, has weakened slightly this week against the basket of 10 currencies, except the Australian dollar which was fetching US75.68¢ late on Thursday afternoon. The Bloomberg Dollar Spot Index slid 0.3 per cent, it fifth straight weekly decline.
The price of brent crude lifted 0.8 per cent to $US55.55 a barrel as investors balanced output cuts by OPEC and other oil producing nations against expanding US crude stockpiles.
Gold slid 0.2 per cent to $US1198.14 an ounce on Thursday afternoon after dropping 1.6 per cent over the week so far, as investor optimism fuels an increased risk appetite.
Reporting season approaches
While Trump dominates headlines, reinstating the Keystone XL and Dakota Access pipeline project and reaffirming a wall will be built on the border of the United States and Mexico, Australian investors are also looking towards reporting season which kicks off on Tuesday.
Equity analysts are expecting a 17 per cent earnings-per-share growth and Citi's Tony Brennan anticipates fairly solid but narrow earnings growth, underpinned by a series of upgrades in resource companies, though this uptick comes off a low base. Industrials are expected to be down due to softening business conditions and a slowing economy.
"Overall, reporting season looks like offering a mixed picture, but recent momentum in market earnings forecasts suggests the results are likely to sustain the rise in the ASX200 in the past few months and keep open the prospect of reaching 6000 by the end of the year," wrote Mr Brennan.
He says the big four banks, which make up 60 per cent of the ASX200 Index, will suffer slowing balance sheet growth, which will temper revenue growth rates. Energy stocks will reap the benefits of higher oil prices and the market will look for comfort in the increased ramp up on LNG production.
A lift in gas and electricity prices will benefit earnings in utility companies, though this will be offset by weaker volumes year to date. Citi expects current deflationary pressures in the market to weigh on the grocery industry but effective management will mean there won't be significant further margin pressure.