U.S. Stocks Climb to Record Highs; Dollar Weakens: Markets Wrap
(Bloomberg) -- U.S. stocks started December by rising to record highs as a renewal of aid talks added to optimism over progress on coronavirus vaccines. The dollar extended its slide to a more than two-year low and Treasury yields jumped.
The risk-on mood powered the S&P 500 and Nasdaq Composite to all-time highs a day after posting double-digit gains last month. Traders continued to bet vaccine news will lead to an economic surge next year. There were also signs that appetite is picking up for a federal spending plan. President-elect Joe Biden urged Congress to pass a relief package.
Communication services, financial and information technology were the biggest S&P industry sector gainers. House Speaker Nancy Pelosi delivered a new proposal for a stimulus package and Senate Majority Leader Mitch McConnell said Tuesday he is circulating among Republicans his own revised plan, which has the backing of President Donald Trump.
“Investors have been prepared to look beyond the near-term continued rise in Covid-19 cases in many regions,” said Mark Haefele, UBS Global Wealth Management’s chief investment officer. “They have focused instead on the potential for a return to normal social and economic activity based on the widespread roll out of effective vaccines in the first half of 2021. We see further upside for global equities in this environment, but also expect market leadership to continue to shift.”
After a record month for global stocks, there’s no end in sight for the rally that’s been fueled by vaccine breakthroughs. Pfizer Inc. and partner BioNTech SE have sought regulatory clearance for their Covid-19 vaccine in the European Union and BioNTech said it could start shipping the first doses “within hours” after approval.
“People have faith that even though things are very uncertain around the virus in the short term, if they look out six months or a year, it’s credible things will be better,” said Alec Young, chief investment officer at Tactical Alpha LLC.
Strong economic data from Asia also added support to the positive mood in markets. Indexes of factory activity in some of North Asia’s biggest export-led economies rebounded in November and China’s recovery continues to lift the region.
It’s not all good news though. Federal Reserve Chairman Jerome Powell cautioned lawmakers that the U.S. economy remains in a damaged and uncertain state during testimony at a Tuesday hearing before the Senate Banking Committee.
In other markets, gold advanced. Oil fell as OPEC+ sought more time to reach a deal on production policy.
Bitcoin pulled back after almost reaching $20,000 for the first time.
These are some key events coming up:
- Fed’s Powell testifies before Congress again on 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 October.
Here are some of the main moves in markets:
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