U.S. stocks pushed higher with investors anxious ahead of Tuesday’s U.S. presidential election. Treasury yields dropped and the dollar touched a one-month high.
After the worst week since March, prices fluctuated as dip buyers sought to revive an earlier rally. Megacap tech shares such as Apple Inc. and Amazon.com Inc. pared losses, while energy stocks gained. The S&P 500 climbed, though it was still off session highs. It plunged 5.6 per cent last week.
“There’s a lot of general positioning before this event, investors are a little bit jittery,” said Charlie Ripley, senior investment strategist for Allianz Investment Management. “You layer in a few of the other uncertainties -- it’s still the COVID situation, with things going on in Europe and parts of the U.S. in the Midwest, investors were reminded that the uncertainty in that situation can still dominate markets.”
With one day before the American presidential election, volatility returned, with the Cboe’s fear gauge turning higher. Polls continue to show Democrat Joe Biden ahead, though battleground states remain tight. The U.S. reported a slight slowdown in virus cases over the weekend, but several states continued to notch record numbers of infections. The U.K.’s prime minister ordered England into a four-week partial lockdown, all but shuttering the economy, while other European countries prepared to increase restrictions.
Once the U.S. election passes, investors will contend with the Federal Reserve delivering a policy decision Thursday before the October jobs report Friday. Earnings will continue to roll in, with PayPal, Expedia and TakeTwo among the firms reporting.
Oil clawed back earlier losses amid signals that Russia, a key OPEC ally, is in talks to possibly postpone the group’s planned output hike in January. Russia, which depends on crude as a key export, saw the ruble weaken to the lowest level since March against the dollar.
Virus developments are also front and center, with daily cases continuing to surge in many parts of the world.
“Going into an election, there’s always, always jitters, there’s volatility,” said Quincy Krosby, chief market strategist at Prudential Financial. “But we have the question mark regarding the surge of the coronavirus. And the question is, how much does it jeopardize the recovery?”
In other markets, gold advanced while the yield on 10-year Treasuries declined. The Bloomberg Dollar Spot index gained for a fourth day.
These are some key events coming up:
- Earnings are due from companies including Nintendo Co., Macquarie Group Ltd., Toyota Motor Corp., Alibaba Group Holding Ltd. and AstraZeneca Plc.
- U.S. Presidential election on Tuesday.
- EIA crude oil inventory report on Wednesday.
- Fed policy decision on Thursday.
- The U.S. labor market report is due Friday.
These are some of the main moves in financial markets worldwide:
Stocks
The S&P 500 Index climbed 1.1 per cent to 3,304.63 as of 3:01 p.m. New York time.
The Dow Jones Industrial Average jumped 1.6 per cent to 26,924.77, the biggest surge in almost four weeks.
The Nasdaq Composite Index was little changed at 10,908.45, the lowest in more than five weeks.
The Stoxx Europe 600 Index surged 1.6 per cent to 347.86, the biggest jump in five weeks.
The MSCI All-Country World Index climbed 1.1 per cent to 557.23, the largest increase in three weeks.
Currencies
The Bloomberg Dollar Spot Index rose 0.1 per cent to 1,173.57, the highest in almost four weeks.
The euro decreased 0.1 per cent to US$1.1634, hitting the weakest in more than five weeks with its sixth consecutive decline.
The British pound declined 0.3 per cent to US$1.2906, the weakest in almost four weeks.
The Japanese yen depreciated 0.2 per cent to 104.83 per dollar, the weakest in a week.
Bonds
The yield on 10-year Treasuries declined three basis points to 0.85 per cent.
The yield on 30-year Treasuries declined four basis points to 1.62 per cent.
Germany’s 10-year yield fell one basis point to -0.64 per cent, the lowest in almost eight months.
Germany’s 10-year yield fell one basis point to -0.64 per cent, the lowest in almost eight months.
Commodities
West Texas Intermediate crude surged 3.3 per cent to US$36.98 a barrel, the biggest jump in almost four weeks.
Copper rose 1.3 per cent to US$3.09 a pound, the largest rise in more than a week.
Gold strengthened 0.8 per cent to US$1,894.58 an ounce, the biggest rise in more than a week.
--With assistance from Kamaron Leach and Vildana Hajric.
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