Stock Rally to Build in Asia After U.S. Records: Markets Wrap

A global equity rally looked set to extend into Asia on Wednesday after U.S. stocks climbed to fresh records. Treasuries retreated with the dollar.

The S&P 500 Index closed at an all-time high and the Dow Jones Industrial Average topped 30,000 for the first time as cash flowed into cyclical sectors. Helping sentiment was the formal start of President-elect Joe Biden’s transition, a clearer sense of what his Treasury Department will have in policy preferences after he nominated Janet Yellen to the post and a third promising vaccine candidate. The Treasury yield curve steepened. Gold dropped toward $1,800 an ounce and oil surged.

Positive vaccine news has fueled optimism that the global economic recovery can continue despite more troubling news on the virus front, with cases rising and more U.S. states enacting restrictions ahead of the Thanksgiving holiday. Next up Wednesday comes a slew of American economic indicators, from jobless claims to readings on consumer confidence and personal income.

“Looking three to six months out, we do think the recovery will maintain its momentum,” Anna Han, equity strategist at Wells Fargo Securities LLC, said on Bloomberg TV. “When you see that reflation trade coming back, it’s telling you that investors are gaining confidence in growth prospects looking forward.”

Elsewhere, Bitcoin rose to a three-year high, topping $19,000 as it closed in on a record.

Here are some key events coming up:

  • Minutes of the most recent Federal Open Market Committee meeting are due Wednesday.
  • U.S. jobless claims, GDP and personal spending data come Wednesday.
  • U.K. Chancellor of the Exchequer will lay out spending plan on Wednesday.
  • Thursday sees a policy decision and briefing from the Bank of Korea.
  • U.S. celebrates the Thanksgiving holiday on Thursday.
  • The week ends with Black Friday, the traditional start of the U.S. holiday shopping season.

These are the main moves in markets:

Stocks

  • The S&P 500 Index rose 1.6%.
  • Futures on Japan’s Nikkei 225 advanced 1%.
  • Hang Seng futures were up 0.2%.
  • Futures on Australia’s S&P/ASX 200 Index gained 0.6%.

Currencies

  • The Bloomberg Dollar Spot Index fell 0.4%.
  • The euro bought $1.1891.
  • The yen was at 104.47 per dollar.
  • The offshore yuan traded at 6.5774 per dollar.

Bonds

  • The yield on 10-year Treasuries rose three basis points to 0.88%.

Commodities

  • West Texas Intermediate crude surged 4.2% to $44.84 a barrel.
  • Gold fell 1.7% to $1,806.39 an ounce.

— With assistance by Sophie Caronello, Kamaron Leach, and Vildana Hajric

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