The Friday Market Minute
- Global stocks hit fresh record highs as focus shifts from political turmoil in Washington to a vaccine-lead recovery for the world economy.
- President Donald Trump makes a video statement that some has interpreted as a concession speech as lawmakers plot his removal from office after making false election claims that incited Wednesday’s violence on Capitol Hill.
- Solid earnings from Micron and Samsung power semiconductor stocks in Europe, while better-than-expected trade and industrial data lifts the DAX to an all-time high.
- Oil hits the highest levels in eleven months, while benchmark 10-year Treasury yields rise to 1.075% amid the ongoing bond market rout.
- U.S. equity futures suggest another record start to the trading day on Wall Street ahead of the December jobs report at 8:30 am Eastern time.
Wall Street pushed higher into record high territory Friday, with stocks in European and Asia scaling to fresh-all time peaks, as investors shifted focus away from the political drama in Washington to a vaccine-driven recovery for the global economy.
President Donald Trump published what many consider to be his first concession speech late Thursday, during which he condemned the violence in Wednesday’s storm of the Capitol building and acknowledged the incoming administration of President-Elect Joe Biden.
The late-hour concession, however, may not quell Democratic moves to remove him from office before January 20, as House Speaker Nancy Pelosi and ranking Democratic Senator Chuck Schumer calling for Republican cabinet members to invoke the 25th Amendment.
Global stocks, which have largely ignored the political turmoil linked to the final chaotic weeks of Trump’s administration, powered to record highs throughout Wednesday’s turmoil, and scaled to a fresh record high in overnight trading on extended bets of deeper stimulus and improved trading relations from Biden’s first 100 days in office.
Wall Street futures reacted in kind, with futures contracts tied to the Dow Jones Industrial Average indicating a 95 point opening bell gain and those linked to the S&P 500 suggesting a 10 point bump higher for the broader benchmark head of the December employment report at 8:30 am Eastern time.
Nasdaq Composite futures, meanwhile, are indicating a more modest 45 point gain even as stronger-than-expected earnings from chipmaker Micron Technology and tech giant Samsung Electronics powered semiconductor stocks in Europe and Asia throughout overnight trading.
Amid the stimulus-fueled stock rally, however, has been a rapid and worrying rise in benchmark bond yields, which are more sensitive to inflation concerns and deficit increases, that have taken 10-year note yields to 1.075%, the highest since early March.
That’s helped the U.S. dollar index, which tracks the greenback against a basket of six global currencies, rebound from the two-and-a-half year lows it touched earlier this week.
The dollar’s gains, however, haven’t held back oil prices, which are up more than 5% this week to the highest levels in 11 months following Tuesday’s move by Saudi Arabia to cut its production by 1 million barrels per day and bets on near-term energy demand from major economies around the world.
U.S. crude futures rose 23 cents in overnight trading to $51.06, while the global benchmark for oil prices — Brent contracts for March delivery — added 34 cents to trade at $54.72.
In European markets, stronger-than-expected December industrial output data, as well as a big jump in exports, helped the DAX performance index rise 0.65% after hitting an all-time high earlier in the session, while the Stoxx 600 benchmark gained 0.6%. Britain’s FTSE 100 was marked 0.11% lower as the pound held at 1.3600 against the U.S. dollar.
In Asia, Japan’s Nikkei 225 extended its 2020 rally into the new year, with the benchmark hitting the highest levels since August 1990 in Friday trading before closing 2.36% higher at 28,139.03 points.
The region-wide MSCI ex-Japan index was also trading firmly higher, hitting an all-time peak in the early session even as a move by index providers MSCI and FTSE Russell dropped three China-based telcos — China Mobile , China Unicom and China Telecom — from their benchmarks following a U.S. ban on investment earlier this week.
This article was originally published by TheStreet.