Stocks Hold Gains Ahead of Key Data; Oil Climbs: Markets Wrap

(Bloomberg) -- Stocks traded mixed on Friday as investors took stock of the recent strength in global equities and awaited key data from the U.S. labor market later. Oil extended gains from a nine-month high after an OPEC+ deal.

S&P 500 futures ticked higher, while European contracts edged lower. Stocks gained in South Korea and retreated in Japan and China. Earlier, U.S. shares spent most of the session at a record high before a report that identified supply chain problems behind a previously disclosed slowdown in Pfizer Inc.’s production plans for its Covid-19 vaccine. On the pandemic front, California will lock down its economy if its critical-care capacity reaches its limit. The Nasdaq Composite eked out a gain to close at an all-time high.

Elsewhere, Treasuries were little changed after recovering somewhat Thursday. The dollar steadied after further overnight declines. U.S. junk bond yields hit record lows overnight. The Taiwan dollar hit its highest since 1997 and the won strengthened. Data later Friday is expected to show U.S. employment gains probably slowed only modestly in November despite a record surge of coronavirus cases.

Global stocks remain within a whisker of record highs as investors bet positive vaccine developments can help sustain a global recovery next year. Uncertainty remains about a U.S. stimulus package, where a bipartisan proposal endorsed by Democratic leaders as a basis for negotiations is luring increased interest from Republicans, lifting the chances for a deal by year-end.

“If we do see earnings growth start to pickup, perhaps 25% to 30% on the S&P 500 next year, and if we see rates remain low and stimulus in place, that remains a good backdrop for risk assets,” Mona Mahajan, investment strategist at Allianz Global Investors, said on Bloomberg TV.

Meanwhile, President-elect Joe Biden said he would ask all Americans to wear a mask to prevent the spread of the coronavirus for the first 100 days of his administration. A study from Moderna Inc. showed its vaccine has the potential for durable immunity.

Oil climbed as OPEC+ reached an agreement to ease its oil-output cuts next year more gradually than previously planned. The Pentagon added four more Chinese companies -- including China National Offshore Oil Corp. -- to a list of firms it says are owned or controlled by the country’s military, exposing them to increased scrutiny and potential sanctions by the U.S.

These are some key events coming up:

• The U.S. employment report on Friday is expected to show more Americans headed back to work in November, though at a slower pace than October.
• German factory orders for October are due Friday.

Here are the main moves in markets

Stocks

• Futures on the S&P 500 rose 0.2% as of 11:38 a.m. in Tokyo. The gauge slipped 0.1% on Thursday.
• Japan’s Topix index declined 0.2%.
• Hong Kong’s Hang Seng fell 0.2%.
• South Korea’s Kospi rose 1.7%.
• Shanghai Composite slid 0.5%.
• Euro Stoxx 50 futures fell 0.3%.

Currencies

• The Bloomberg Dollar Spot Index fell less than 0.1%.
• The yen was little changed at 103.80 per dollar.
• The offshore yuan traded flat at 6.5381 per dollar.
• The euro bought $1.2142, little changed.

Bonds

• The yield on 10-year Treasuries was at 0.91%.

Commodities

• West Texas Intermediate crude rose 1.6% to $46.36 a barrel.
• Gold held at $1,841.02 an ounce.

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