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Stocks, futures push higher after two-week slide: markets wrap

The dollar edged lower and Treasuries were little changed ahead of this week’s Federal Reserve meeting.
Image: Nicolas Asfouri/AFP/Getty Images

European and Asian stocks rose Monday along with US futures amid a flurry of deal activity and signs of progress toward a virus vaccine. The dollar edged lower and Treasuries were little changed ahead of this week’s Federal Reserve meeting.

All of the industry groups in the Stoxx Europe 600 Index rose, with technology shares leading gains. Futures on the Nasdaq 100 Index jumped 1.9%. Comments from the Pfizer Inc. CEO about the likely deployment of a vaccine to Americans by year-end buoyed sentiment, as did reports that a deal for TikTok in the US is nearing a conclusion.

SoftBank Group Corp. surged after Nvidia Corp. agreed to buy the Japanese firm’s chip division Arm Ltd. for $40 billion, while Gilead Sciences Inc. will acquire Immunomedics Inc. for about $21 billion. Gold and crude oil ticked higher.

Global stocks are coming off the back of the first consecutive weeks of declines since March and traders remain on edge given the recent reassessment of valuations and volatility in options markets. The Fed is expected this week to maintain its dovish stance on policy as investors look for signs the global economy is recovering from the pandemic. Strategists at Goldman Sachs Group Inc. and Deutsche Bank AG suggested the recent pullback in the U.S. is nearing an end.

“Unquestionably the virus story is the dominant macro pivot event, especially for equities, and is more likely to be dominated by optimism surrounding a vaccine,” said Stephen Innes, chief market strategist at AxiCorp Ltd. “It’s a busy week on the central bank front where Wednesday’s FOMC meeting will take center stage.”

The Pfizer comments suggested a shorter time frame for a vaccine than most public health officials have suggested. Earlier, AstraZeneca Plc and the University of Oxford restarted a UK trial of their vaccine after the study was halted over concerns about a participant who fell ill.

Elsewhere, Japan’s ruling party chooses its new leader Monday. Yoshihide Suga is the favorite to replace Prime Minister Shinzo Abe.

Here are some key events coming up:

  • China industrial production and retail sales data is due on Tuesday.
  • Wednesday sees the FOMC policy decision and news conference from Chair Jerome Powell.
  • Bank of Japan, Bank Indonesia and Bank of England policy decisions come Thursday.
  • Friday sees quadruple witching for US markets when the quarterly expiration of futures and options on indexes and stocks happens on the same day.

These are the main moves in markets:

Stocks

  • Futures on the S&P 500 Index advanced 1.4% as of 8:12 a.m. London time.
  • The Stoxx Europe 600 Index climbed 0.7%.
  • The MSCI Asia Pacific Index increased 0.9%.
  • The MSCI Emerging Market Index advanced 0.9%.

Currencies

  • The Bloomberg Dollar Spot Index declined 0.1%.
  • The euro was little changed at $1.1851.
  • The British pound advanced 0.2% to $1.2826.
  • The Japanese yen strengthened 0.2% to 106 per dollar.
  • The offshore yuan strengthened 0.1% to 6.8294 per dollar.

Bonds

  • The yield on 10-year Treasuries declined less than one basis point to 0.66%.
  • The yield on two-year Treasuries climbed less than one basis point to 0.13%.
  • Germany’s 10-year yield fell one basis point to -0.49%.
  • Britain’s 10-year yield sank two basis points to 0.166%.
  • Japan’s 10-year yield declined one basis point to 0.021%.

Commodities

  • West Texas Intermediate crude increased 0.3% to $37.49 a barrel.
  • Brent crude was little changed at $39.93 a barrel.
  • Gold strengthened 0.3% to $1,947.11 an ounce.
© 2020 Bloomberg

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