Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Wall St follows European stocks higher on stimulus, Brexit

Published 12/27/2020, 08:47 PM
Updated 12/28/2020, 02:55 PM
© Reuters. FILE PHOTO: A man wearing a protective face mask walks past a screen displaying a graph showing recent Nikkei share average outside a brokerage, amid the coronavirus disease (COVID-19) outbreak, in Tokyo

© Reuters. FILE PHOTO: A man wearing a protective face mask walks past a screen displaying a graph showing recent Nikkei share average outside a brokerage, amid the coronavirus disease (COVID-19) outbreak, in Tokyo

By Stephen Culp

NEW YORK (Reuters) -Wall Street was on track to close at record highs on Monday, but crude prices lost ground as long-awaited pandemic relief and Brexit trade deals fueled investors' risk appetite.

U.S. equities followed the example of their European counterparts with a broad rally, and communications services and consumer discretionary stocks were leading the charge.

But crude prices slumped as weak demand and a potential increase in production offset the effects of the fiscal aid package.

President Donald Trump reversed course on Sunday by signing a $2.3 trillion stimulus and spending package into law, heading off a potential government shutdown and setting the stage for congressional Democrats to push for more robust direct payments of $2,000 to millions of Americans.

"Stocks are riding the coattails of the additional stimulus program and that is for good reason," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis. "If you look to year-end, it will be a fairly light trading week but we seem poised to end the year on a high note."

While Wall Street still faces some uncertainties, Sandven sees conditions remaining favorable as we enter 2021.

"Medical progress for COVID-19 continues to evolve and that will unfold at a more accelerated rate now as you get into the new year," Sandven added. "And importantly, the macro environment is favorable for stocks."

Britain reached a trade agreement with the European Union on Thursday, days before leaving one of the world's largest trading blocs, and urged businesses to prepare for disruptions resulting from the completion of Brexit.

The Dow Jones Industrial Average rose 235.6 points, or 0.78%, to 30,435.47, the S&P 500 gained 36.57 points, or 0.99%, to 3,739.63 and the Nasdaq Composite added 124.46 points, or 0.97%, to 12,929.20.

European shares had their strongest close in 10 months and German shares hit an all-time high on U.S. stimulus and Brexit trade deals.

The ongoing rollout of coronavirus vaccines also buoyed sentiment, with Pfizer Inc (NYSE:PFE) announcing it expects to complete distribution of 200 million doses in Europe by September.

Markets in Britain were closed on Monday in observance of the Boxing Day holiday.

The pan-European STOXX 600 index rose 0.66% and MSCI's gauge of stocks across the globe gained 0.62%.

Emerging market stocks lost 0.19%. MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.18% lower, while Japan's Nikkei rose 0.74%.

U.S. Treasury yields rose early in the session but gave up much of those gains by late afternoon as the risk-on rally lost some steam.

Benchmark 10-year notes last fell 2/32 in price to yield 0.9364%, from 0.93% late on Thursday.

The 30-year bond last fell 6/32 in price to yield 1.6743%, from 1.666% late on Thursday.

The dollar was essentially flat against a basket of world currencies but the euro gained strength as investors priced out Brexit risk.

The dollar index rose 0.01%, with the euro unchanged at $1.2204.

The Japanese yen weakened 0.34% versus the greenback at 103.86 per dollar, while Sterling was last trading at $1.3449, down 0.73% on the day.

Crude prices dropped as the prospect of increased OPEC+ output in the face of weak demand dampened stimulus cheer.

U.S. crude dropped 1.26% to settle at $47.62 barrel. Brent was last at $50.92 per barrel, down 0.72% on the day.

Gold reversed its early gains as the dollar recovered its losses amid the stocks rally.

© Reuters. A man walks outside the NYSE in New York

Spot gold dropped 0.1% to $1,874.00 an ounce.

Latest comments

Wall Street debt. New Year Revolution hard in the paint I'm a Newson it's been proven that is going to keep going up like 1.5% of non altitude of latitude staying focus in this stimulus package we still developing more money in Saturday's bracket Focus
How long do you live with 600$ today ? no more than 1 week or 2.
The name of the game: Who can Print more money. The easier way to be rich
I wonder how 600$ paycheck can help to resolve the problems caused by pandemia.
It won't, but investors don't give a ****about the small people
600$ ? now trump can pay his taxes
nope, its 2000$ trump2024 doesn't need to pay IRS *******
too small, too late
pigs are taking bath in slaughter house... current global financial mkt situation
Lets see. Stimulus will generate inflation, china is about to burst their real estate bubble, more lockdowns to come, nasdaq is about to burst and Europe is dominated by socialism. I think we are ok. Just need to wait for the Senate decision
My continent is dominated by socialism? I was asking myself why my car is now a t-34 so thanks ☺️
Danny -Do NOT ever leave your house Chicken Little bc the sky is falling! You’re probabaly scared of your own shadow
totally the opposite thinking my friend. Looks like you did not get it.
Americans screwed again. The even bigger *****comes once Joey starts raising taxes on businesses.
Depends on Senate race
If one case of virus variant is found in the USA, stocks will go down like crazy!
Why vacine stillWorks against the varient as long as that is true market will look thru it
Wrong. Its called vaccine. Read some
why stimulus if Christmas was up 3%? seems like everything is fine.
why isn't it up more?
why would it be? already priced in
Prepare for hyperinflation
Next 3 months... Print money again.. All American will be jumping up and down.. No need to work.. Money dropping from the sky.. Next move.. Blame China again..
Worst president ever! He plays games with people's lives.
Last minute Hero
Tom, if you want to point the finger at somebody other than Trump, then point it at the Senate Republicans rather than Pelosi. She was fine with $2000 but it was Senate Republicans who refused to consider a larger amount than $600.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.