Stimulus hopes push global equity markets to new records, bonds hit 11-mth lows

By David Randall NEW YORK (Reuters) - A global equities rally pushed Japan's Nikkei to a more than three-decade high and U.S.

Reuters January 09, 2021 06:05:11 IST
Stimulus hopes push global equity markets to new records, bonds hit 11-mth lows

Stimulus hopes push global equity markets to new records bonds hit 11mth lows

By David Randall

NEW YORK (Reuters) - A global equities rally pushed Japan's Nikkei to a more than three-decade high and U.S. stock benchmarks to new records on Friday, while safe havens such as Treasuries and gold sold off as investors looked past U.S. political unrest and focused on further stimulus to mend the economic damage of the coronavirus pandemic.

Risky assets, including oil, emerging market stocks and bitcoin, jumped, while a sell-off in 10-year U.S. Treasuries pushed their yields to the highest levels since March.

The surge came despite data from the Labor Department that showed the U.S. economy shed 140,000 jobs in December, the first time that payrolls decreased in eight months. Yet investors expect that President-elect Joe Biden's incoming administration will pass bigger fiscal stimulus and infrastructure spending plans.

"The economic reality stands in stark contrast to the markets' view of the world – we are all living in the present, with a badly damaged economy, while the market is living in the future, expecting a post-COVID or at least post-vaccine world," said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance.

MSCI's gauge of stocks across the globe gained 0.84%% following broad gains in Asia and Europe, lifting it to new records. The Nikkei hit its highest level since September, 1990.

On Wall Street, the Dow Jones Industrial Average rose 56.84 points, or 0.18%, to 31,097.97, the S&P 500 gained 20.89 points, or 0.55%, to 3,824.68 and the Nasdaq Composite added 134.50 points, or 1.03%, to 13,201.98.

"Investors are buying the end of an erratic Trump administration and looking forward to something new, which is a Biden presidency and the prospect of a significant spending program," said Francois Savary, chief investment officer at Swiss wealth manager Prime Partners.

Rising risk appetite weighed on bonds. Benchmark 10-year notes fell 12/32 in price to yield 1.1119%, from 1.071% late on Thursday.

The dollar index rose 0.267%, with the euro down 0.38% to $1.2223.

Cryptocurrency bitcoin pared gains after hitting another all-time high, dropping 1.6% on the day. Market watchers have said a pullback is likely following its recent run-up.

In commodity markets, oil traders continued to focus on Saudi Arabia's pledge to deepen production cuts, pushing oil prices near 11-month highs.

U.S. crude rose 2.8% to end at $52.24 per barrel and Brent settled at $55.99, up 3% on the day.

Spot gold dropped 3.4% to $1,847.15 an ounce.

(Reporting by David Randall; Editing by Steve Orlofsky, Dan Grebler, Cynthia Osterman and Marguerita Choy)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.