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World shares hold close to record highs; U.S. markets close for Thanksgiving

Economy Nov 26, 2020 08:01AM ET
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2/2 © Reuters. A men wearing a mask walk at the Shanghai Stock Exchange building at the Pudong financial district in Shanghai 2/2

By Elizabeth Howcroft

LONDON (Reuters) - Global stocks held near record highs on Thursday, while the rally in European stocks paused, as recent vaccine progress, Joe Biden's U.S. presidential election win and hopes for further stimulus kept markets bullish.

World equities are having their best month on record in November, boosted by a slew of positive vaccine announcements and hopes that Biden's administration will deliver more economic stimulus and political stability.

The MSCI world equity index, which tracks shares in 49 countries, rose to a record high on Wednesday and held close to it on Thursday, up 0.1% on the day at 1142 GMT, as markets shrugged off the latest rise in U.S. jobless claims.

Europe's STOXX 600, which is also having its best month on record, up 14.4% in November, was down 0.1% on the day .

"The market’s very much looking forward to 2021 and the time when vaccines will be rolled out and economic activity can get back to normal," said Kiran Ganesh, a multi-asset strategist at UBS.

Ganesh said that the equities rally is "particularly driven by the rotation trade away from large caps and towards small caps, away from the U.S. and towards Europe, and away from technology and towards some of the cyclicals."

Markets also took a boost from minutes from the U.S. Federal Reserve's Nov. 4-5 meeting, which showed that officials discussed how the central bank's asset purchases could be adjusted to provide additional support to the economy.

The minutes said policymakers may give new guidance about its bond-buying "fairly soon".

Graphic: G3 central bank balance sheets - https://fingfx.thomsonreuters.com/gfx/mkt/xklpyboblvg/20N26B.png

"2021 is going to be a year of economic catch-up," said Samy Chaar, chief economist at Lombard Odier. "When you keep the pandemic contained and under control, economic activity catches up very quick."

The U.S. dollar slipped overnight, then recovered during the European session. Versus a basket of currencies, it was flat on the day at 92.056 at 1153 GMT, having touched its lowest in nearly three months in early London trading .

It also lost out versus the safe-haven Japanese yen, down 0.2% on the day at 104.24 at 1154 GMT.

U.S. markets were closed for Thanksgiving on Thursday. Biden urged Americans to avoid big family gatherings and to wear protective masks and maintain social distancing as COVID-19 cases soar.

In France and Germany, consumer confidence plunged in November under new lockdown restrictions, challenging the idea of a quick return to normal in the euro zone's two biggest economies.

German Chancellor Angela Merkel told parliament that lockdown measures will be in place until at least the end of December and possibly longer.

The euro was down 0.1% against the dollar, at $1.1902 at 1159 GMT. Euro-sterling was up 0.2% at 89.12.

UK investors were watching trade talks between Britain and the European Union, with little more than a month until the status-quo transition period ends on Dec. 31.

Britain's finance minister said on Thursday that "it's clear what the shape of the deal looks like" but that the United Kingdom would not sign a deal at any cost.

The UK announced this week new restrictions on activity that will apply after the month-long lockdown ends on Dec. 2. London's FTSE 100 was down 0.5%.

Euro zone government bonds were little changed, with Germany's benchmark Bund yield at -0.576%.

Oil prices slipped, stalling a rally which saw futures hit their highest in nearly eight months on Wednesday.

Gold prices picked up as investors bet that the grim U.S. economic data would lead to further stimulus.

Graphic: Emerging market stocks' November to remember - https://fingfx.thomsonreuters.com/gfx/mkt/xlbvgzdxwpq/Pasted%20image%201606391823401.png

World shares hold close to record highs; U.S. markets close for Thanksgiving
 

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Comments (6)
Benoit Avril
Benoit Avril Nov 26, 2020 2:25AM ET
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Shares rally because of soft data. It's completely twisted with stimulus.
perplexed76 .
perplexed76 . Nov 26, 2020 1:26AM ET
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soft data from October before second wave came? that's really a triumph.
Joshua Faris
Joshua Faris Nov 25, 2020 11:34PM ET
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Wonderful! This has been a really informative post. Thank you for sharing this information. looking forward to more posts.  http://www.centreforex.com/forex-signals.php
James Bell
James Bell Nov 25, 2020 10:43PM ET
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A resuscitated patient who achieves a stable condition on full life support can’t really be called recovered.
Luke Lee
Luke Lee Nov 25, 2020 10:40PM ET
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lol even the headline was changed because of renewed optimism
Luke Lee
Luke Lee Nov 25, 2020 9:46PM ET
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Tmr the markets will rally on renewed optimism on covid vaccine
 
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