Stocks rise on signs of growth upturn; dollar dips: markets wrap

Asian stocks and US futures climbed Tuesday, aided by positive factory activity data and optimism that vaccines will bolster the global economy. The dollar dipped.

China and South Korea outperformed as shares rose across the Asia Pacific. Factory activity in some of North Asia’s biggest export-led economies rebounded in November, with a manufacturing purchasing managers’ index in China hitting a decade high.

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S&P 500 futures advanced after the benchmark dropped the most in more than a week but closed out its best month since April. Gold edged up and Bitcoin was at a record. Oil fell for a third day as OPEC+ sought more time to reach a deal on production policy after a meeting broke down without an agreement.

Rapid progress toward a coronavirus vaccine has given investors confidence to price in a return to normalcy and faster economic growth. An MSCI index of global stocks jumped 12% in November, its biggest monthly gain on record. Moderna Inc. surged Monday after the company said it plans to request clearance for its coronavirus vaccine in the US and Europe.

“I feel pretty confident that portfolios should be positioned for continued good performance from equity markets as we head into 2021,” Chris Iggo, chief investment officer for core investments at AXA Investment Managers, said in a note.

At the same time, Federal Reserve Chair Jerome Powell is cautioning lawmakers that the US economy remains in a damaged and uncertain state despite progress made in the development of vaccines.

In testimony released ahead of a Tuesday hearing before the Senate Banking Committee, Powell gave no indication how the central bank may respond to those worries when it conducts its next policy meeting, while reiterating that it would use all of its tools to help the economy recover.

The Reserve Bank of Australia kept its cash rate target and three-year yield target unchanged, and said positive vaccine news should support the global recovery.

These are some key events coming up:

  • Federal Reserve Chairman Jerome Powell testifies before Congress on Tuesday and Wednesday.
  • The US employment report on Friday is expected to show more Americans headed back to work in November, though at a slower pace than October.

Here are some of the main moves in markets:

Stocks

  • S&P 500 futures rose 0.8% as of 6 a.m. in London. The S&P 500 Index dipped 0.5%.
  • Topix index rose 0.8%.
  • Australia’s S&P/ASX 200 Index rose 1.1%.
  • South Korea’s Kospi index rose 1.7%.
  • Hong Kong’s Hang Seng Index rose 1.1%.
  • Shanghai Composite Index added 1.4%.
  • Euro Stoxx 50 futures gained 0.3%.

Currencies

  • The yen traded at 104.37 per dollar.
  • The offshore yuan ticked up 0.3% to 6.5652 per dollar.
  • The Bloomberg Dollar Spot Index dipped 0.3%.
  • The euro was at $1.1956, up 0.3%.

Bonds

  • The yield on 10-year Treasuries was at 0.84%.
  • Australia’s 10-year bond yield rose three basis points to 0.92%.

Commodities

  • West Texas Intermediate crude slid 0.6% to $45.06 a barrel.
  • Gold ticked up 0.6% to $1,787.08 an ounce.
© 2020 Bloomberg

Source: moneyweb.co.za