Dec 28, 2021
U.S. stocks rally to records as investors cheer aid
Bloomberg News
,Credit Suisse Still Favors Chinese Stocks, Stephens Says
U.S. equities rallied to records after President Donald Trump backed away from earlier threats and signed a coronavirus aid package.
The S&P 500 Index, Dow Jones Industrial Average and Nasdaq Composite closed at all-time highs following Trump’s surprise approval of the combined US$2.3 trillion Covid-19 relief and government funding package. Germany’s DAX Index also rose to a record. Treasuries dipped and the dollar strengthened.
Bitcoin retreated after a rally over the holiday pushed it past US$28,000 for the first time.
U.S. investors cheered the U.S. aid package, restoring some of the optimism that drove global stocks to a record this month even as the pandemic escalated. In approving the bill, Trump also demanded a vote in Congress to replace the US$600 in direct stimulus payments with US$2,000 -- a non-binding request that is unlikely to pass both chambers. Still, Goldman Sachs Group Inc. upgraded its first-quarter U.S. economic growth forecast because of the measure.
“The new law is large enough to make a significant difference for individuals,” Dennis DeBusschere, head of portfolio strategy at Evercore ISI, said in a note to clients. “Ignore the noise about the ‘disappointing’ checks and focus on the setup for a robust economic recovery in 2021, particularly in the services sector.”
Alibaba Group Holding Ltd. tumbled in Hong Kong despite boosting its share buyback program to US$10 billion, amid ongoing concern over China’s inquiry into alleged monopolistic practices. Regulators over the weekend ordered affiliate Ant Group Co. to return to its roots as a provider of payments services, a development that threatens to clip its growth.
On the coronavirus front, more restrictions are being imposed to fight the spread of the new, more infectious strain. Indonesia imposed a temporary ban on all foreigners from visiting the country, while Taiwan will increase the quarantine period for flight crews to seven days. Meanwhile, the European Union kicked off a continent-wide vaccination campaign less than a week after clearing a shot developed by Pfizer Inc. and BioNTech SE.
Elsewhere, the pound weakened after the U.K. last week clinched a historic Brexit trade deal with the European Union.
Here are some key events coming up:
- U.S. pending home sales and goods trade balance data are due Wednesday.
- U.S. initial jobless claims figures are published Thursday.
- Most global stock markets are closed Friday for New Year’s Day.
These are the main moves in markets:
Stocks
- The S&P 500 Index rose 0.9 per cent as of 4 p.m. in New York.
- The Stoxx Europe 600 Index rose 0.7 per cent.
- The MSCI Asia Pacific Index gained 0.1 per cent.
- The MSCI Emerging Market Index slipped 0.2 per cent.
Currencies
- The Bloomberg Dollar Spot Index rose 0.1 per cent.
- The euro rose 0.1 per cent to US$1.2208.
- The British pound decreased 0.8 per cent to US$1.3449.
- The Japanese yen weakened 0.4 per cent to 103.86 per dollar.
Bonds
- The yield on 10-year Treasuries increased less than one basis point to 0.93 per cent.
- Germany’s 10-year yield declined two basis points to -0.57 per cent.
- Britain’s 10-year yield was unchanged at 0.25 per cent.
Commodities
- West Texas Intermediate crude fell 1.2 per cent to US$47.66 a barrel.
- Gold fell 0.5 per cent to US$1,873.58 an ounce.
--With assistance from Eric Lam and Cormac Mullen.