Stocks Rally to Records as Investors Cheer Aid: Markets Wrap

(Bloomberg) -- U.S. equities rallied to records after President Donald Trump backed away from earlier threats and signed a coronavirus aid package.

The S&P 500 Index, Dow Jones Industrial Average and Nasdaq Composite closed at all-time highs following Trump’s surprise approval of the combined $2.3 trillion Covid-19 relief and government funding package. Germany’s DAX Index also rose to a record. Treasuries dipped and the dollar strengthened.

Bitcoin retreated after a rally over the holiday pushed it past $28,000 for the first time.

U.S. investors cheered the U.S. aid package, restoring some of the optimism that drove global stocks to a record this month even as the pandemic escalated. In approving the bill, Trump also demanded a vote in Congress to replace the $600 in direct stimulus payments with $2,000 -- a non-binding request that is unlikely to pass both chambers. Still, Goldman Sachs Group Inc. upgraded its first-quarter U.S. economic growth forecast because of the measure.

“The new law is large enough to make a significant difference for individuals,” Dennis DeBusschere, head of portfolio strategy at Evercore ISI, said in a note to clients. “Ignore the noise about the ‘disappointing’ checks and focus on the setup for a robust economic recovery in 2021, particularly in the services sector.”

Alibaba Group Holding Ltd. tumbled in Hong Kong despite boosting its share buyback program to $10 billion, amid ongoing concern over China’s inquiry into alleged monopolistic practices. Regulators over the weekend ordered affiliate Ant Group Co. to return to its roots as a provider of payments services, a development that threatens to clip its growth.

On the coronavirus front, more restrictions are being imposed to fight the spread of the new, more infectious strain. Indonesia imposed a temporary ban on all foreigners from visiting the country, while Taiwan will increase the quarantine period for flight crews to seven days. Meanwhile, the European Union kicked off a continent-wide vaccination campaign less than a week after clearing a shot developed by Pfizer Inc. and BioNTech SE.

Elsewhere, the pound weakened after the U.K. last week clinched a historic Brexit trade deal with the European Union.

Here are some key events coming up:

• U.S. pending home sales and goods trade balance data are due Wednesday.
• U.S. initial jobless claims figures are published Thursday.
• Most global stock markets are closed Friday for New Year’s Day.

These are the main moves in markets:

Stocks

• The S&P 500 Index rose 0.9% as of 4 p.m. in New York.
• The Stoxx Europe 600 Index rose 0.7%.
• The MSCI Asia Pacific Index gained 0.1%.
• The MSCI Emerging Market Index slipped 0.2%.

Currencies

• The Bloomberg Dollar Spot Index rose 0.1%.
• The euro rose 0.1% to $1.2208.
• The British pound decreased 0.8% to $1.3449.
• The Japanese yen weakened 0.4% to 103.86 per dollar.

Bonds

• The yield on 10-year Treasuries increased less than one basis point to 0.93%.
• Germany’s 10-year yield declined two basis points to -0.57%.
• Britain’s 10-year yield was unchanged at 0.25%.

Commodities

• West Texas Intermediate crude fell 1.2% to $47.66 a barrel.
• Gold fell 0.5% to $1,873.58 an ounce.

©2020 Bloomberg L.P.