Stocks surge on stimulus hopes; dollar depressed

  • 12/17/2020
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NEW YORK (Reuters) - Global stocks hit record highs on Thursday, fueled by growing optimism that deals will be reached over a fresh U.S. stimulus package and a post-Brexit trade deal between the United Kingdom and the European Union. From stocks to safe-haven gold and volatile bitcoin, financial assets were in festive mood. Bitcoin hit another all-time high after first shattering the $20,000 level on Wednesday. Oil also climbed, touching a nine-month high, with strong Asian demand adding to positive sentiment. The U.S. dollar was the day’s standout loser, as the general risk-on mood sent the safe haven currency to 2-1/2-year lows against major peers. U.S. congressional negotiators were “closing in on” a $900 billion COVID-19 aid bill expected to include $600-$700 stimulus checks to individuals, lawmakers said on Wednesday. Progress on a stimulus package overshadowed continued concerns over the economic impact of the pandemic, highlighted by U.S. weekly jobless claims hitting a three-month high on Thursday and weak U.S. retail sales data on Wednesday. All the major U.S. indices closed at record highs. The Dow Jones Industrial Average rose 0.49% to end at 30,301.79 points, while the S&P 500 .SPX gained 0.57% to 3,722.43. The Nasdaq Composite climbed 0.84% to 12,764. “Wall Street is completely focused on stimulus talks and ignored deteriorating U.S. economic data,” said Edward Moya, senior market analyst at OANDA in New York. The dollar index, which tracks the greenback versus a basket of six currencies, fell 0.599 points or 0.66%, to 89.851. “The dollar is reflecting the amount of debt that the U.S. is assuming and that’s probably going to increase as we continue to battle the pandemic,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York. U.S. Federal Reserve Chairman Jerome Powell vowed on Wednesday to keep pouring cash into markets until the U.S. economic recovery is secure. Bond traders, however, were disappointed he did not extend the Fed’s purchase program deeper down the yield curve, and U.S. Treasuries sold off at longer tenors, but others took it as a signal the bank will have their back. [US/] The MSCI world stock index reached a new high, rising 4.74 points or 0.74%, to 641.84. European stocks and the euro rallied for the fourth straight session as investors built up positions in riskier assets, anticipating a sharp economic recovery in 2021 backed by wider vaccine rollouts and ultra-easy monetary policy. Europe’s broad FTSEurofirst 300 index added 0.23%, at 1,533. The British pound hit May 2018 highs on hopes of a post-Brexit trade deal. Sterling maintained gains despite senior British minister Michael Gove putting the chances of securing a trade deal with the EU at less than 50%. The euro was last up 0.54% at $1.2263. Brent crude futures settled up 42 cents at $51.50 a barrel, and touched a session high of $51.90. U.S. West Texas Intermediate (WTI) crude futures rose by 54 cents to $48.36 a barrel, with a session high of $48.59. Both benchmarks hit their highest since early March. Gold prices rose to a one-month peak. Spot gold prices rose $20.1179 or 1.08 percent, to $1,884.26 an ounce. U.S. gold futures settled up 1.7% at $1,890.40. Better-than-expected labor data in Australia pushed the Aussie as high as $0.7624, its strongest since mid-2018. [AUD/] The Aussie is also riding high on surging prices for iron ore and a mood that has pushed currencies in Malaysia, Singapore, Thailand, Taiwan, Sweden and Norway to milestone peaks. [EMRG/FRX] The kiwi rose to its strongest since early 2018 after New Zealand’s economic growth beat expectations. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 4.29 points or 0.66 percent,%. The yen was last down 0.36 percent, at $103.1100.

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