Stocks Advance With U.S. Futures Before Election: Markets Wrap

(Bloomberg) -- Stocks rallied for a second day along with U.S. futures hours before the American presidential election. Currency traders braced for increased volatility.

European mining shares surged, helped by a sliding dollar. Banks including BNP Paribas SA advanced after the French lender joined European peers in posting lower-than-expected bad-loan provisions from the pandemic. Defensive shares lagged. Equity markets in Beijing, Hong Kong, Australia and South Korea all surged more than 1%.

Contracts on the S&P 500 and Dow Jones Industrial Average signaled the underlying gauges will add to Monday’s gain, clawing back some of their tumbles last week. Treasuries slipped.

Traders hedged against the prospect of post-election volatilty in currencies from the yuan to the British pound, with a measure of expected swings in China’s currency at the highest in more than nine years.

“The election outcome will drive all markets over the next day or two,” said Torsten Slok, chief economist at Apollo Global Management. “How they move depends on to what extent we have clarity about the results.”

Investors began the week reflecting a bit more optimism following weeks of speculation that a contested election outcome may produce no clear winner for some time. Polls continue to tell them that Democratic nominee Joe Biden is ahead, though the race remains tight in some battleground states, some of which are seeing virus cases soar.

Once the U.S. election passes, investors will contend with the Federal Reserve delivering a policy decision Thursday before the October jobs report Friday. Elsewhere, oil held gains after jumping the most in three weeks on Monday on increasing signs OPEC+ will delay a planned easing of output cuts.

These are some key events coming up:

U.S. general elections on Tuesday.EIA crude oil inventory report on Wednesday.Fed policy decision on Thursday.The key U.S. non-farm payrolls report is due Friday.Earnings are due this week from companies including Alibaba Group Holding Ltd., AstraZeneca Plc, Nintendo Co., Macquarie Group Ltd. and Toyota Motor Corp.

These are some of the main moves in financial markets:

Stocks

The Stoxx Europe 600 Index gained 1.3% as of 9:33 a.m. London time.Futures on the S&P 500 Index increased 1.1%.Nasdaq 100 Index futures advanced 0.8%.The MSCI Asia Pacific Index climbed 0.9%.

Currencies

The Bloomberg Dollar Spot Index declined 0.5%.The British pound gained 0.5% to $1.2977.The Japanese yen was little changed at 104.73 per dollar.The Taiwanese dollar was little changed at NT$28.92 per U.S. dollar.

Bonds

The yield on 10-year Treasuries gained four basis points to 0.88%.Germany’s 10-year yield climbed two basis points to -0.62%.Britain’s 10-year yield increased three basis points to 0.252%.New Zealand’s 10-year yield fell one basis point to 0.553%.

Commodities

West Texas Intermediate crude jumped 2.9% to $37.87 a barrel.Gold strengthened 0.1% to $1,897.33 an ounce.Soybeans climbed 1.1% to $10.64 a bushel.Iron ore fell 1.5% to $112.80 per metric ton.

For more articles like this, please visit us at bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2020 Bloomberg L.P.