Photographer: Kiyoshi Ota / Bloomberg
Photographer: Kiyoshi Ota / Bloomberg
The dollar continued to decline and weakened to its lowest level in 2 1/2 years. Futures on the S&P 500 Index rose slightly, while most Asian stocks made gains in limited trading on the last day of 2020.
Shares rose in Hong Kong and China. They fell in Australia. The markets in Japan and South Korea are closed. S&P 500 futures rose slightly after US stocks rose earlier, with small-cap stocks outperforming. Volumes were light over the holiday week, with S&P 500 shares trading about 25% below the 30-day average. Bitcoin extended its record-breaking rally to more than $ 29,000 before pulling out.
Investors have pushed risky assets, including equities, to sky-high valuations this year as they expected the widespread proliferation of vaccines to revive economic growth and boost corporate earnings in 2021 amid unprecedented stimulus. The MSCI World Index of Global Equities is expected to end the year at or near an all-time high and is up about 14% in 2020, up nearly 68% since its March low.
“Investors continue to weigh hopes for incentives against negative pandemic developments,” Tom Essaye, a former Merrill Lynch trader who founded the newsletter “The Sevens Report,” wrote to customers. “Markets have aggressively priced in many positive solutions to these events (and more) in 2021.”
As for the coronavirus, the new strain of Covid-19 first identified in the UK is emerging in other parts of the world. The highly communicable variant has been found in California and a second possible case is being investigated in Colorado. Two people in Singapore may have it too. Covid cases in New York City are approaching a seven-day mean positivity rate of 8%, the highest in more than seven months. California reported 432 deaths from the virus on Tuesday, marking a daily record. The vaccine from AstraZeneca Plc-University of Oxford was approved for use in the UK and added a homegrown weapon to help slow the pandemic.
Elsewhere, Bloomberg’s dollar meter tapped down to its lowest level since April 2018, when traders squared year-end currency positions amid limited liquidity. The pound tumbled higher after the UK parliament approved Prime Minister Boris Johnson’s post-Brexit trade deal.
A year after the first signs of a deadly virus surfaced in Wuhan, China, World Health Organization Director General Tedros Adhanom Ghebreyesus said in a year-end address that there is “light at the end of the tunnel.”
Here are some major events coming up:
- The first figures for unemployment benefits in the US will be published on Thursday.
- Most global stock markets are closed on Friday for New Years Day.
These are the main movements in markets:
Shares
- S&P 500 Index futures are up 0.1% from 12:48 pm in Sydney. The S&P 500 Index gained 0.1%.
- The Australian S & P / ASX 200 index fell 0.6%.
- Hong Kong’s Hang Seng index rose 0.6%.
- The Shanghai Composite Index gained 1%.
Currencies
- The yen stood at 103.15 per dollar.
- The offshore yuan traded at 6.5041 a dollar.
- The Bloomberg Dollar Spot Index fell 0.2%.
- The euro was $ 1.2303.
- The British pound was at $ 1.3643, up 0.1%.
Bonds
- The yield on 10-year government bonds fell a basis point to 0.92% on Wednesday. They won’t trade until London opens due to the Tokyo holiday.
- The yield on Australia’s 10-year bonds fell to 0.97%.
Raw materials
- West Texas Intermediate crude oil fell 0.3% to $ 48.26 a barrel.
- Gold was flat at $ 1,895.89 an ounce.