Stocks Rise, Bonds Dip Amid Hope for Stimulus Deal: Markets Wrap

(Bloomberg) -- Global stocks approached another record high as hopes for a U.S. stimulus deal countered fears about resurgent coronavirus cases. Benchmark Treasuries and the dollar slipped for the first time this week.

Mining and chemical firms led gains among pro-cyclical shares in Europe, after equities rose across much the Asia Pacific. Britain’s pound surged before U.K. Prime Minister Boris Johnson’s face-to-face meeting with European Commission President Ursula von der Leyen to save Brexit trade negotiations later on Wednesday.

Global equities were energized by the White House’s surprise re-entry into pandemic-relief talks with a $916 billion proposal that opened a potential new path to a year-end deal. S&P 500 futures edged up, though Nasdaq 100 contracts slipped following the gauge’s 10th straight gain.

With little time left before the year-end holiday break and no let-up in Covid-19 cases in some of the biggest economies, investors are clinging to prospects for an 11th-hour stimulus deal and more progress on vaccine roll-outs. Emergency-use authorization for Pizer Inc.’s shot in the biggest economy may come as early as Thursday.

Pfizer shares rose in pre-market trading. Rival vaccine producer Moderna Inc. also climbed, after announcing a partnership with Roche Holding AG on patient trials.

The opportunities are “in equities and credit, so we are overweight, we are risk on,” Richard Lacaille, global chief investment officer at State Street Global Advisors, said on Bloomberg TV. “We know that we will be tested again next year in terms of Covid and elsewhere.”

Elsewhere, SoftBank Group Corp. shares rose almost 6% in Tokyo after Bloomberg reported it’s debating a new strategy to go private. And machinery orders in Japan jumped at the fastest pace in more than a decade, adding to signs that the global economy is continuing to recover from the pandemic.

Here are some key events coming up:

• Thursday brings the European Central Bank policy decision and a press briefing from Christine Lagarde. Economists widely expect the central bank to increase and extend its pandemic bond-buying program.
• The FDA meets to discuss the vaccine made by Pfizer/BioNTech on Thursday.
• Jobless claims data are due in the U.S. on Thursday.

Here are the main moves in markets:

Stocks

• The Stoxx Europe 600 Index increased 0.5% as of 7:36 a.m. London time.
• Nasdaq 100 Index futures sank 0.2%.
• Futures on the S&P 500 Index advanced 0.1%.
• The MSCI Asia Pacific Index gained 0.7%.

Currencies

• The Bloomberg Dollar Spot Index dipped 0.1%.
• The British pound gained 0.6% to $1.3441.
• The Japanese yen was little changed at 104.14 per dollar.
• The Taiwanese dollar was little changed at NT$28.51 per U.S. dollar.

Bonds

• The yield on 10-year Treasuries increased two basis points to 0.94%.
• Britain’s 10-year yield gained three basis points to 0.283%.
• Germany’s 10-year yield advanced one basis point to -0.60%.
• Japan’s 10-year yield advanced less than one basis point to 0.022%.

Commodities

• West Texas Intermediate crude climbed 0.1% to $45.66 a barrel.
• Gold weakened 0.7% to $1,857.42 an ounce.
• LME aluminum climbed 1.7% to $2,024 per metric ton.
• Platinum dipped 1.2% to $1,025 an ounce.

©2020 Bloomberg L.P.