U.S. Stocks Fall From Record Highs; Dollar Gains: Markets Wrap

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01 Dec 2020, 12:59 PM IST

U.S. Stocks Fall From Record Highs; Dollar Gains: Markets Wrap

The New York Stock Exchange (NYSE) logo is displayed on the trading floor in New York, U.S. (Photographer: Michael Nagle/Bloomberg)

(Bloomberg) -- U.S. stocks fell from records as investors assessed the prospects for risk assets after a blistering month long rally. The dollar strengthened.

The S&P 500 dropped the most in more than a week, though the benchmark index still registered its best month since April. Global stocks and American small caps posted their best months on record. Broad selling sent the Dow Jones Industrial Average lower. The tech-heavy Nasdaq indexes that trailed in November fared better, briefly touching another record high on Monday. Gold slumped and Bitcoin rallied back to an all-time high.

“The market may be getting tired from its very strong November and simultaneous all time highs (DJIA, S&P and Russell 2K), which could push the benchmarks into a traditional mid-December low,” said Sam Stovall, chief investment strategist at CFRA Research.

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The rapid pace to a coronavirus vaccine has given investors the confidence to price in a return to normalcy and faster economic growth, helping lift shares of companies that were hardest hit by the pandemic.

Over the weekend, U.S. Surgeon General Jerome Adams said the federal government hopes to quickly review and approve requests from two drugmakers for emergency approval of their Covid-19 vaccines.

“November has been such an unbelievable move up,” said Andrew Mies, chief investment officer of 6 Meridian. “All that is being driven by the vaccine.”

Shares of Moderna Inc. surged 20% on Monday after the company said it plans to request clearance for its coronavirus vaccine in the U.S. and Europe.

The MSCI World Index soared 13% in November, the best performance on record.

The risk-on mood across markets has hurt demand for haven assets. Gold posted its largest monthly decline in four years. Even after gaining on Monday, the dollar slumped 2.4% in November.

Oil edged lower in New York. OPEC+ began two days of potentially complicated talks to hash out the size of its oil-production cuts next year, with the group’s president calling for caution in a fragile market.

Elsewhere, the MSCI Asia Pacific Index sank 1.6% on Monday, the biggest loss in a month.

Bitcoin took less than three years to replicate the euphoric ascent that catapulted the cryptocurrency into the mainstream consciousness. The world’s largest digital-asset gained as much as 8.7% to $19,351, according to data compiled by Bloomberg. It traded at a few cents for several years after its late 2008 launch by an unknown software developer in the wake of the global financial crash.

These are some key events coming up:

The Reserve Bank of Australia holds a policy meeting on Tuesday.
Federal Reserve Chairman Jerome Powell testifies before Congress on Tuesday and Wednesday.
The U.S. employment report on Friday is expected to show more Americans headed back to work in November, though at a slower pace than last month.

Here are some of the main moves in markets:

Stocks

The S&P 500 Index declined 0.5% to 3,621.82 as of 4:01 p.m. New York time, the lowest in a week on the largest drop in more than a week.

The Dow Jones Industrial Average decreased 0.9% to 29,643.97, the lowest in a week on the biggest dip in more than a week.

The Nasdaq Composite Index dipped 0.1% to 12,198.74, the first retreat in more than a week.

The MSCI All-Country World Index sank 0.9% to 617.87, the lowest in a week on the biggest dip in a month.

The Stoxx Europe 600 Index sank 1% to 389.36, the lowest in a week on the largest decrease in more than a month.

Currencies

The Bloomberg Dollar Spot Index jumped 0.3% to 1,144.98, the highest in a week on the biggest increase in three weeks.

The euro decreased 0.3% to $1.1927, the largest decrease in almost three weeks.

The Japanese yen weakened 0.3% to 104.40 per dollar, the biggest fall in a week.

Bonds

The yield on 10-year Treasuries rose one basis point to 0.85%.

The yield on 30-year Treasuries increased one basis point to 1.58%.

Germany’s 10-year yield rose two basis points to -0.57%.

Britain’s 10-year yield climbed two basis points to 0.305%, the biggest surge in almost three weeks.

Commodities

West Texas Intermediate crude sank 0.7% to $45.19 a barrel, the largest decrease in more than two weeks.

Gold depreciated 0.7% to $1,776.09 an ounce, the weakest in five months.