Equities hit record highs in US session as dollar falls on vaccine hopes

Reuters NEW YORK | Updated on December 04, 2020 Published on December 04, 2020

Britain expected to begin innoculations next week, US FDA to hold advisory meeting next week

Most world equity benchmarks rose along with gold and US Treasury bonds on Thursday as hopes for a vaccine-led economic recovery offset warnings the death toll from the coronavirus pandemic could spike in the coming weeks.

Stocks have raced to global record peaks over the last four weeks, pushing the dollar down to 2 1/2-year lows, following the announcement of three viable vaccines. Oil prices, meanwhile, touched their highest levels since March.

Britain will begin inoculations next week, while the US Food and Drug Administration will hold its own advisory committee meeting next week that could determine when treatments are approved for use in the country. New York Governor Andrew Cuomo has said the state's first vaccine delivery, enough for 170,000 residents, is expected on December 15.

“Markets have pulled forward and bridged the gap between where we were pre-vaccine and where we are going to be when everyone has got the shot,” said Ned Rumpeltin, European head of currency strategy at TD Securities.

“It puts a floor under the long-term risks, but there are plenty of short-term ones in the interim that we need to sort out,” Rumpeltin said.

The head of the US Centers for Disease Control and Prevention warned Wednesday that the months of December, January, and February will be “the most difficult time in the public health history of this nation.”

The mayor of Los Angeles, meanwhile, imposed sweeping new economic restrictions on Wednesday and said that “our city is now close to a devastating tipping point.”

MSCI's gauge of stocks across the globe gained 0.32 per cent following broad gains in Asia and mixed trading in Europe.

On Wall Street, the Dow Jones Industrial Average rose 85.99 points, or 0.29 per cent, to 29,969.78, and the Nasdaq Composite added 27.82 points, or 0.23 per cent, to 12,377.18.

The S&P 500 hit a record high during the session but ended down 2.25 points, or 0.06 per cent, to 3,666.76 after a report that Pfizer Inc PFE.N had slashed the target for the rollout of its COVID-19 vaccine.

Investors kept looking for signs that a stimulus deal could be reached in the US Congress to boost the economy until vaccines are widely available.

The US Labor Department said initial jobless claims decreased to a seasonally adjusted 712,000 for the week ended November 28. Economists polled by Reuters had forecast 775,000 applications.

Benchmark 10-year US Treasury notes rose 10/32 in price to yield 0.9129 per cent, from 0.946 per cent late on Wednesday. The dollar index fell 0.357 per cent, with the euro up 0.25 per cent to $1.2145.

“Currency investors are taking on more risk following the latest vaccine breakthroughs,” Morgan Stanley said in a note.

Brent crude prices rose to their highest since early March on renewed hopes for a US stimulus deal and after major oil producers agreed to increase output by a modest 500,000 barrels per day (bpd) from January.

US crude rose 0.77 per cent to $45.63 per barrel and Brent was at $48.59, up 0.7 per cent on the day.

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Published on December 04, 2020
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