Stock rally pauses as European cyclicals retreat: markets wrap

European stocks fluctuated and US stock futures were mixed as a slew of sobering economic data deflated a spirited risk rally. Bitcoin tumbled 8%.

Cyclical companies including banks and energy firms that had led the post-vaccine surge retreated while more defensive tech shares gained. That was mirrored by equity futures in the US, where contracts on the main gauge were flat while those on the tech-heavy Nasdaq 100 rose.

Even with three successful vaccines on the table, sentiment turned cautious Thursday as the virus toll continued to rise in Europe and the US, leading German Chancellor Angela Merkel to call on Europe’s ski resorts to close this winter. The task of a global vaccination comes with logistical problems, all while the virus gains ground and economic recoveries wobble.

“Question marks still surround the speed of a global roll-out and the proportion of populations willing to be vaccinated,” Geir Lode, head of global equities at the international business of Federated Hermes, wrote in a note to clients. “These factors, combined with a second consecutive week of rising jobless claims in the US, appear to have brought the rotation into value and back-to-work stocks grinding to a halt for now.”

Meanwhile, Treasury futures edged higher as the cash market is closed, with traders off for Thanksgiving holiday in the US. A deluge of data on Wednesday brought the first back-to-back rise in weekly US jobless claims since July and a widening trade deficit.

Investors took some solace from the minutes out of the Federal Reserve’s latest meeting, which showed the central bank discussed at the November 4-5 meeting providing more guidance on its bond-buying strategy “fairly soon” but didn’t see a need for immediate adjustments.

Elsewhere, Asian shares saw modest gains. West Texas Intermediate crude dipped toward $45 a barrel. In cryptocurrencies, Bitcoin and Ethereum plunged following their recent surge.

Here are some key events coming up:

• US celebrates the Thanksgiving holiday on Thursday. The stock market closes at 1 p.m. on Friday.
• The week ends with Black Friday, the traditional start of the US holiday shopping season.

Here are the main moves in markets:

Stocks

• Futures on the S&P 500 Index climbed 0.1% as of 11:15 a.m. London time.
• The Stoxx Europe 600 Index dipped 0.1%.
• The MSCI Asia Pacific Index gained 0.7%.
• The MSCI Emerging Market Index rose 0.9%.

Currencies

• The Bloomberg Dollar Spot Index gained 0.1%.
• The euro dipped 0.1% to $1.1906.
• The British pound sank 0.2% to $1.3356.
• The onshore yuan strengthened 0.1% to 6.575 per dollar.
• The Japanese yen strengthened 0.2% to 104.27 per dollar.

Bonds

• Germany’s 10-year yield fell one basis point to -0.58%.
• Japan’s 10-year yield gained one basis point to 0.026%.
• Britain’s 10-year yield sank one basis point to 0.305%.

Commodities

• West Texas Intermediate crude declined 1.1% to $45.22 a barrel.
• Brent crude declined 0.9% to $48.19 a barrel.
• Gold strengthened 0.4% to $1,814.45 an ounce.