Global equities hover near record highs

Investors weigh first approval of coronavirus vaccine, prospects of US stimulus

NEW YORK:

World equity benchmarks hovered near record highs and the dollar edged off 2-1/2-year lows on Wednesday as investors weighed the first approval of a coronavirus vaccine and the prospects of more US economic stimulus with disappointing American jobs data.

Britain approved Pfizer’s Covid-19 vaccine on Wednesday, jumping ahead of the United States and Europe to become the first country to do so for the newly-developed treatment. Inoculations should begin among the most vulnerable segments of its population early next week.

US health officials have announced plans to start vaccinating Americans as early as mid-December, once regulatory approvals are in place.

“Early vaccines will help bolster the reflation and normalcy trade, which has been the key macro theme in driving equity markets,” said Neil MacKinnon, global macro strategist at VTB Capital.

Yet disappointing private jobs data in the United States kept a lid on gains and helped support safe-haven assets. Employers added 307,000 jobs last month, well below the 410,000 expected by economists polled by Reuters, according to the ADP National Employment Report.

The dollar index rose 0.15%, while US benchmark 10-year notes were last down 1/32 in price to yield 0.9376%, from 0.934% late on Tuesday.

MSCI’s gauge of stocks across the globe gained 0.05% following modest gains in Asia and mixed trading in Europe. Gold rose 0.6% as signs of progress on the relief package bolstered bullion’s appeal as a hedge against possible inflation.

Oil prices dipped after OPEC and its allies left markets in limbo by postponing a formal meeting to decide whether to lift output in January. US crude recently fell 0.09% to $44.51 per barrel and Brent was at $47.40, down 0.04% on the day. Oil has raced up nearly 30% over the last month.

Published in The Express Tribune, December 3^rd, 2020.

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