Equities inch higher to new records despite fears of pandemic spike

An exterior view of the facade on the outside the New York Stock Exchange building in New York City, New York, US, March 13, 2020. — Reuters pic
An exterior view of the facade on the outside the New York Stock Exchange building in New York City, New York, US, March 13, 2020. — Reuters pic

NEW YORK, Dec 3 — World equity benchmarks inched higher along with safe haven assets such as gold and US Treasury bonds today 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.

Britain will begin inoculations next week, while the US Food and Drug Administration will holding 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 Dec. 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 yesterday 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 yesterday and said that “our City is now close to a devastating tipping point.”

MSCI’s gauge of stocks across the globe gained 0.37 per cent following broad gains in Asia and mixed trading in Europe.

In morning trading on Wall Street, the Dow Jones Industrial Average rose 81.79 points, or 0.27 per cent, to 29,965.58, the S&P 500 gained 4.27 points, or 0.12 per cent, to 3,673.28 and the Nasdaq Composite added 35.89 points, or 0.29 per cent, to 12,385.25

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

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

Benchmark 10-year notes last rose 3/32 in price to yield 0.936 per cent, from 0.946 per cent late yesterday. The dollar index fell 0.428 per cent, with the euro up 0.38 per cent to US$1.2161.

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

Oil prices slipped today as producers including Saudi Arabia and Russia locked horns over the need to extend record production cuts set in place in the first wave of the Covid-19 pandemic.

US crude fell 0.4 per cent to US$45.10 per barrel and Brent was at US$48.13, down 0.25 per cent on the day.

Spot gold added 0.5 per cent to US$1,839.90 an ounce. US gold futures gained 0.75 per cent to US$1,839.40 an ounce. — Reuters

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