Global stocks rally eases as vote count continues: markets wrap

A global equity rally showed signs of easing on Friday, with US futures unwinding some of this week’s surge as the presidential election count continued. The dollar held near a two-year low.

The Stoxx Europe 600 Index fluctuated at the open, with gains for banks and insurers offsetting losses for tech companies. Contracts on the S&P 500 retreated after the underlying index climbed almost 2% Thursday, heading for its best week since April. Futures on the tech-heavy Nasdaq 100, which is up over 9% this week, also declined.

Treasuries were little changed after Federal Reserve officials kept interest rates near zero on Thursday, and made no change to asset purchases while stressing that the US economy needs more fiscal and monetary policy support. Crude oil declined and gold was flat.

Votes are still being tallied in a handful of key US states, with Democrat Joe Biden potentially needing to win just one to unseat President Donald Trump. The president questioned the credibility of the election, raising the prospect of a long stalemate as he challenges the results. Meanwhile, Republicans seem set to retain control of the Senate after also making inroads into the House.

“The market reaction to the unfolding election news suggests that financial markets would prefer to see a constrained Biden presidency,” said Paul O’Connor, head of multi-asset at Janus Henderson Investors. “The economic backdrop to this election is one of an incomplete global recovery that remains threatened by the continued spread of Covid-19 in many major economies as well as fast-fading fiscal support measures.“

The US became the first country to top 100,000 coronavirus infections in a single day. Fed Chair Jerome Powell warned that mounting infection rates are a risk to the recovery. Meanwhile, France warned of a “violent” second wave as it joined European countries including Italy and Poland in reporting new highs in daily infections.

These are some key events coming up:

• The US non-farm payrolls report is due Friday.

These are some of the main moves in markets:

Stocks

• The Stoxx Europe 600 index was little changed as of 8:17 a.m. in London.
• S&P 500 futures dipped 0.2%.
• The MSCI Asia Pacific Index rose 0.4%.
• The MSCI Emerging Market Index climbed 0.3%.

Currencies

• The Bloomberg Dollar Spot Index was little changed after slumping 1% on Thursday.
• The yen was at 103.53 per dollar, little changed.
• The euro gained 0.1% to $1.1839.
• The British pound dipped 0.1% to $1.3135.

Bonds

• The yield on 10-year Treasuries held at about 0.77%.
• Germany’s 10-year yield was steady at -0.64%

Commodities

• West Texas Intermediate crude fell 0.9% to $38.46 a barrel.
• Gold was little changed at $1,948.97 an ounce.