The minute of the Tuesday market
- Global equities extend gains, with record highs in Asia, as President-elect Joe Biden’s transition team has access to White House briefings and funding.
- President Donald Trump vows to continue to “fight” the November election results, but many see the move as the first sign of a formal concession.
- Media is suggesting that former Fed Chairman Janet Yellen will replace Steve Mnuchin as Treasury Secretary, becoming the first woman in U.S. history to hold the coveted government post.
- Oil prices extend the recent rally to trade at the highest levels since early March on renewed energy demand following vaccine breakthroughs in the US and Europe.
- Wall Street futures point to another strong open, with the Dow potentially testing the 30,000 point barrier, ahead of earnings from Best Buy and Dollar Tree.
U.S. equity futures surged on Tuesday, as oil prices hit their highest level since early March, as markets reacted to signals of an electoral loss concession from President Donald Trump and the potential nomination Janet Yellen as Secretary of the Treasury.
Trump, who continues to allege – without evidence – that the November election was riddled with fraud and insisting he should be named the winner, said on Monday evening that President-elect Joe Biden and his new administration will have access funding and safety briefings. and other administration devices that will allow a smoother transition of power on January 20.While stopping before a full concession and vowing to continue to “fight” against his clear electoral defeat, Trump’s move removes at least one of the market’s main concerns over a contested election result.Biden, meanwhile, is set to appoint former Federal Reserve Chairman Janet Yellen as Treasury secretary, according to several media outlets, a move investors will likely interpret as indicative of the president-elect’s ambitions for stimulus spending.
As Biden is now firmly entrenched on the White House lawn and drugmakers in the United States and Europe set up successful coronavirus vaccines as the final weeks of the year approach, actions appear ready. for another increase on Tuesday in the hope of a return to a form of ‘normal’ in the first quarter of 2021.
Futures contracts linked to the Dow Jones Industrial Average suggest an opening gain of 300 points for the 30-stock benchmark, pulling it down to a touching distance from the barrier of 30,000 points, while those linked to the S&P 500 wider indicate a 28.6 point lead which would test the level of 3600 points.
Futures on the Nasdaq Composite, meanwhile, suggest a modest opening bell gain of 45 points for the tech-focused benchmark, which is up 36.3% for the year.
Tuesday’s pre-trade session is expected to be loaded with October home price data at 9:00 a.m. EST and third quarter results from Best Buy (BBY) – Get the report, Dollar tree (DLTR) – Get the report et HP Inc. (HPQ) – Get the report
With around 95% of benchmark reports so far, third-quarter profits are expected to fall 6.7% from a year ago, according to data from Refinitiv, and are expected to decline a further 11% in the three month ending in December.
Oil prices were also on the march, reaching the highest levels since the global pandemic began to spread in early spring, as investors bet on renewed energy demand and continued supply restrictions. of OPEC, heading into next year.
WTI crude futures for January delivery, the new U.S. benchmark, traded 48 cents higher than their Monday close in New York and changed hands at $ 43.54 a barrel at the start of trading European markets, while Brent contracts for January delivery, the global benchmark, rose 43 cents to $ 46.49 a barrel.
European equities were also looking ahead to strong early gains, even as the euro tested the 1.1900 level against a weaker US dollar, following a stronger than expected GDP reading in Germany’s third quarter , the region’s largest economy, and a move by the UK government to introduce coronavirus testing for foreign visitors that will eliminate the need for a two-week quarantine.
The benchmark Stoxx 600, the region’s broadest measure of share prices, was significantly higher by 0.6% at the start of trading in Frankfurt, while the UK FTSE 100 added 0.86% on the strength of solid gains for oil and energy stocks.
The German DAX performance index, meanwhile, rose 0.9% following a statement by stock operator Deutsche Boerse, which revealed its intention to increase the benchmark from 30 to 40 by the first quarter of next year, the biggest shake since the index. was formed in 1988.
Overnight in Asia, Japan’s Nikkei 225 returned from its Thanksgiving Monday vacation to grow 2.5% higher on the session, bringing the regional benchmark to 26,165.59 points, the highest since May 1991. The MSCI ex-Japan regional index, meanwhile, added 0.37% to trade to a new high of 632.80 points before the final hours of trading.