Global Stocks Advance with Futures; Dollar Drops: Markets Wrap


(Bloomberg) — Global stocks headed toward their best weekly gain since July and U.S. futures also climbed as European companies boosted guidance and the White House suddenly signaled an openness to large-scale stimulus.

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Shares rose in Europe on a host of companies raising outlooks, from Denmark’s drugmaker Novo Nordisk and jewelry producer Pandora to German online clothing retailer Zalando. Property firm British Land Co. gained on reinstating its dividend. Stocks underperformed in Spain, where the government is weighing a state of emergency for the capital to control the spread of Covid-19.

Italy’s 10-year bond yield fell to a record low amid fading domestic political risks and central-bank support. S&P 500 contracts rose following reports Treasury Secretary Steven Mnuchin told Nancy Pelosi that President Donald Trump wants agreement on a comprehensive aid package. Treasuries gained and the dollar retreated.



chart: MSCI gauge of global equities heads for best week since early July


© Bloomberg
MSCI gauge of global equities heads for best week since early July

Investors are winding up a volatile week with a mild risk-on attitude. With the U.S. president recuperating from Covid-19 in the final stretch of the election campaign, they’re increasingly betting a Joe Biden victory is likely. Speculation is moving now to whether Democrats will sweep Congress too and then enact massive stimulus.

“Large-scale fiscal easing will push down the value of the U.S. dollar, while giving bond yields a modest boost,” strategists led by Peter Berezin at BCA Research wrote in a note. “Non-U.S. stocks will outperform their U.S. peers. Value stocks will outperform growth stocks.”

Elsewhere, Indian bonds climbed after the central bank announced a range of measures to help credit flow within the economy, including standing ready to conduct open-market bond operations.

Oil in New York is poised for the biggest weekly gain since June with Hurricane Delta forcing operators to shut-in almost 92% of crude output in the Gulf of Mexico.

These are the main moves in markets:

Stocks

The Stoxx Europe 600 Index gained 0.4% as of 9:06 a.m. London time.Futures on the S&P 500 Index rose 0.4%.Nasdaq 100 Index futures climbed 0.3%.The MSCI Emerging Market Index increased 0.4%.

Currencies

The Bloomberg Dollar Spot Index declined 0.3%.The British pound increased 0.2% to $1.2968.The Japanese yen strengthened 0.1% to 105.88 per dollar.The offshore yuan appreciated 0.5% to 6.7026 per dollar.South Africa’s rand strengthened 0.7% to 16.471 per dollar.

Bonds

The yield on 10-year Treasuries fell two basis points to 0.77%.Germany’s 10-year yield decreased one basis point to -0.54%.Britain’s 10-year yield dipped one basis point to 0.276%.Italy’s 10-year yield declined two basis points to 0.744%, the lowest on record.

Commodities

West Texas Intermediate crude climbed 0.3% to $41.33 a barrel.Gold advanced 1.1% to $1,914.37 an ounce.LME zinc surged 2.9% to $2,434 per metric ton.Iron ore jumped 2.9% to $121.26 per metric ton.

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