Oil up, stocks rally to records as US political uncertainty ebbs

Spurred on by vaccine hopes, oil reached levels not seen since before the coronavirus pandemic began to spread in March. ― Picture by Miera Zulyana
Spurred on by vaccine hopes, oil reached levels not seen since before the coronavirus pandemic began to spread in March. ― Picture by Miera Zulyana

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NEW YORK, Nov 25 — Stocks ended at record highs yesterday while bitcoin and oil prices also rose as political uncertainty subsided after US President-elect Joe Biden got the formal go-ahead to begin his transition to the White House.

Short of spelling out his defeat after repeated false claims that he had won the November 3 race, President Donald Trump said Monday he told the federal agency that must sign off on the presidential transition to begin the process.

Japan’s Nikkei closed at its highest since 1991, European stocks ended at their highest since February and Wall Street’s Dow Industrials hit a record high above 30,000, with reports of Biden’s nomination of former Federal Reserve Chair Janet Yellen further enticing risk-taking investors.

The bullish backdrop was upbeat Covid-19 vaccine news, including likely shots for some first responders in a matter of weeks and a highly successful so-called “vaccine for the world” that could be more easily distributed across even the poorest countries.

“A little bit of decreasing uncertainty on the election front, the market seems pretty favourable on the Yellen announcement, it just seems like one of those good days where all things are moving a little higher,” said Ross Mayfield, investment strategy analyst at Baird.

The Dow Jones Industrial Average rose 454.97 points, or 1.54 per cent, to 30,046.24, the S&P 500 gained 57.82 points, or 1.62 per cent, to 3,635.41 and the Nasdaq Composite added 156.15 points, or 1.31 per cent, to 12,036.79.

The S&P also set a record closing high.

The pan-European STOXX 600 index rose 0.91 per cent and MSCI’s gauge of stocks across the globe gained 1.44 per cent, on track to close at a record high.

Emerging market stocks rose 0.45 per cent. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.56 per cent higher, while Japan’s Nikkei rose 2.50 per cent.

Bitcoin rose over 5 per cent with US$20,000 (RM81,750) in sight, with traders expecting volatility ahead due partly to tomorrow’s Thanksgiving holiday in US markets.

The cryptocurrency last rose 3.5 per cent to US$19,017.73 per coin. Gold fell for the fifth session in six.

“Trading conditions are likely to be volatile for the remainder of the week and crypto traders should expect US$1,000 swings in the matter of minutes,” said of bitcoin Edward Moya, senior market analyst at OANDA in New York.

In other currency markets the dollar was under pressure from Yellen’s expected push for fiscal stimulus.

The dollar index fell 0.374 per cent, with the euro up 0.41 per cent to US$1.1889.

The Japanese yen strengthened 0.08 per cent versus the greenback at 104.45 per dollar, while Britain’s pound was last trading at US$1.3359, up 0.27 per cent on the day.

An index of emerging market currencies was little changed on the day. It hit a 2-1/2-year high last week.

Also spurred on by vaccine hopes, oil reached levels not seen since before the coronavirus pandemic began to spread in March.

“The possibility of having a vaccine next year increases the odds that we’re going to see demand return in the new year,” said Phil Flynn, senior analyst at Price Futures Group in Chicago.

US crude rose 4.25 per cent to US$44.89 per barrel and Brent was at US$47.89, up 3.97 per cent on the day.

Spot gold dropped 1.6 per cent to US$1,806.56 an ounce. Silver fell 1.51 per cent to US$23.22.

Long-end Treasury yields extended their rise, further steepening the US yield curve, as investors rushed to riskier investments.

Benchmark 10-year notes last fell 7/32 in price to yield 0.8816 per cent, from 0.859 per cent late on Monday.

The 30-year bond yield was last at 1.6065 per cent, from 1.563 per cent and the 2-year note was last yielding 0.1641 per cent, from 0.169 per cent. — Reuters

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