Stocks at highs ahead of Fed decision Global stocks are flirting with their best levels in more than four and a half years - with some national benchmarks approaching all-time highs - as investors become more optimistic about the world's economic prospects, and thus corporate earnings. But moves on Wednesday are meek in patches as some traders hold fire ahead of a busy few days of US-based "headline risk." These include the conclusion of the Federal Reserve's monetary policy meeting and fourth-quarter GDP data later on Wednesday, and Friday's non-farm payrolls report. The FTSE All-World equity index is up 0.2 per cent to 235.3 following a solid session in Asia and as the FTSE Eurofirst 300 opens barely changed. If the All-World closes above 235.7, it will claim its highest mark since June 2008. Index futures suggest Wall Street's S&P 500 will add 2 points to Tuesday's fresh five-year high of 1,508. Another 3.8 per cent of gains and the US stock barometer will close at a record high. The rally that has delivered such levels is mainly based on signs of improvement in the US, Chinese and, to a lesser extent, German economies. Expectations of corporate profits have also been well-managed, particularly in the US, and this has allowed investors to express pleasant surprise during the current earnings season. According to Bloomberg, around three-quarters of the 179 companies in the S&P 500 that had released results by Tuesday's close exceeded profit forecasts. Adding impetus to the risk asset surge are the ultra-loose monetary policies in the US, Japan and Europe. As is often the case when equity benchmarks start to be associated with record levels, this tends to spark increased interest from previously cautious investors. "We see the prospect for sustained asset-price reflation in coming months, the result of G3 stimulus efforts and structural reallocation flows," Morgan Stanley said in a research note. This has three implications: reflation would lend support to higher-yielding emerging market assets, safe-haven assets would continue to weaken and expectations about emerging market policy would likely shift. Indeed, that switch away from fixed-income "safety" plays can be seen in the US Treasury market, where the price of the 10-year note is falling, pushing the yield up 1 basis point to a nine-month high of 2.01 per cent. In commodities, most industrial products are feeding off the upbeat mood, with copper adding 0.3 per cent to $3.69 a pound and Brent crude gaining 15 cents to $114.51 a barrel. Gold is up $4 to $1,667 an ounce. Another factor that has supported the recent rally in growth-sensitive assets has been waning fears about the eurozone debt crisis. The euro is trading above $1.35 for the first time in 14 months, shrugging off news that the Catalonia region of Spain had requested €9.1bn of aid from the central government. Earlier in Asia, Tokyo was again the star performer, rising 2.3 per cent to a 33-month high as hopes for more monetary stimulus weakened the yen and boosted exporters. The Japanese unit is trading at Y90.93 to the US dollar from Y90.72 in New York late Tuesday, after Japan's finance minister Taro Aso said that excessive yen strength was currently in a correction phase. In China, the Shanghai Composite added 1 per cent, supported by property stocks on news the government would allow house price rises of up to 10 per cent this year, according to Reuters. Additional reporting by Song Jung-a in Seoul