US stocks jump more in five months; oil rallies


By: Bloomberg |

Updated: November 3, 2020 10:29:38 PM

Pedestrians pass the New York Stock Exchange in New York.

Written by Claire Ballentine and Kamaron Leach

US stocks skyrocketed with a wave of optimism sweeping the global stock markets, while millions of Americans were on their way to vote. The dollar weakened, yields increased, and crude oil rose a month high.

The S&P 500 jumped more than 2% amid growing bets that banks and oil companies are among sectors prepared for gains after the election. The benchmark index fluctuated more than 1% in six of the last seven trading sessions. Meanwhile, Alibaba Group Holding Ltd.’s shares fell up to 9.7% after China suspended Ant Group Co.’s initial public offering, in which Alibaba owns about a third of the shares.

Treasury bills fell and a dollar indicator fell further in three weeks, with the risky climate prevailing. Oil increased earnings after jumping on Monday with growing signs that OPEC + will delay a planned reduction in production cuts.

“It’s a reflection of the market’s belief that there won’t be much uncertainty after election day,” said Matt Stucky, stock portfolio manager at Northwestern Mutual Wealth Management Co. “The worst outcome for election day is a really uncertain scenario winner in which it will take weeks and many legal comings and goings before the decision is finally made. “

While businesses reflecting a Democratic trend have remained steady, betting markets are not convinced. One indicator dropped to just over 50% probability of the so-called Blue Wave – that Democrats ousted President Donald Trump and won majorities in Congress. Traders protected the prospects for post-voting volatility, taking a measure of the expected swings of the Chinese yuan to its highest level in more than nine years.

Elsewhere, the benchmark credit derivatives index, which measures the perceived risk of high-yielding US companies, had the biggest gain in almost two months, implying a lower likelihood of default.

Markets are reflecting more optimism after weeks of speculation that a contested election result may not produce a clear winner for some time and cloud the markets. The polls continue to indicate that Democratic candidate Joe Biden is ahead, although the race looks fierce in some battlefield states, some of which are seeing cases of viruses soar.

“The upward trend in the market and the underlying leadership of the energy, industrial and materials sectors imply a blue wave that incorporates the potential for approval of stimulus and infrastructure spending accounts,” said Sam Stovall, chief strategist for CFRA Research investments.

In Europe, mining stocks rose, helped by the fall of the dollar. The banks recovered after BNP Paribas SA joined its European peers in recording provisions for non-performing loans due to the pandemic.

These are some important events to come:

* EIA crude oil inventory report on Wednesday.
* Fed policy decision on Thursday.
* The main US non-farm payroll report is delivered Friday.
* The earnings are due this week from companies like Alibaba Group Holding Ltd., AstraZeneca Plc, Nintendo Co., Macquarie Group Ltd. and Toyota Motor Corp.
* These are some of the main changes in the financial markets:


* The S&P 500 index rose 2.2% to 3,383.10 at 11:30 am New York time, the biggest one-week increase in the biggest jump in five months.
* The Dow Jones Industrial Average rose 2.4% to 27,573.21, the biggest in more than a week on the biggest jump in five months.
* The Nasdaq Composite Index increased 2% to 11,179.23, the biggest increase in more than three weeks.
* The MSCI All-Country World Index rose 2% to 569.25, the highest in a week on the largest jump in 20 weeks.


* The Bloomberg Dollar Spot Index decreased 0.8% to 1,164.02, reaching the lowest level in a week with the first decline in a week and the biggest drop in more than two months.
* The euro rose 0.8% to $ 1.1729, the first advance in more than a week and the biggest increase in 14 weeks.
* The Japanese yen strengthened 0.2% to 104.50 per dollar, the biggest gain in a week.
* The yield on 10-year Treasury bills rose five basis points to 0.89%, the highest in five months.
* The yield on 30-year Treasury bills increased by five basis points to 1.67%, the highest in more than a week.
* Germany’s 10-year yield gained two basis points to -0.62%, the highest in a week and the largest increase in more than a week.


* West Texas Intermediate crude rose 2% to $ 37.53 a barrel, the highest value in a week.
* Gold appreciated 0.6% to $ 1,906.25 an ounce, the highest value in a week.

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