The Friday Market Minute
- Global stocks resume post election rally as hand recounts in Arizona, and formal congratulations from China, cement President-Elect Joe Biden's path to the White House.
- World stocks on pace for a 1.3% weekly gain, taking the value of all tradeable equities past $95 trillion for the first time in history.
- U.S. coronavirus infections surge past 150,000 on Thursday, less than a week after topping 100,000, as Chicago issues stay-at-home orders and New York mulls tighter restrictions heading into Thanksgiving.
- Global oil prices ease after a surprise increase of 4.3 million barrels in domestic crude stocks, although WTI is still on pace for its second consecutive weekly advance.
- Wall Street futures suggest a firmer open Friday following better-than-expected earnings from Dow components Cisco and Disney, with factory gate inflation data set for 8:30 am Eastern time.
U.S. equity futures jumped higher Friday, while global stocks resumed their record-setting rally, as markets reacted to recount figures cementing President-Elect Joe Biden's path to the White House while shrugging off the relentless surge of coronavirus infections in major economies around the world.
Hand recounts of six counties in Arizona look to have confirmed President-Elect Biden's win in the formerly Republican-held state, and its 11 Electoral College votes, while formal congratulations from officials in China added to both the legitimacy of Biden's win and the pressure on President Donald Trump to concede defeat to his Democratic challenger.
That election dynamic looks set to counter ongoing concerns for the speed and breadth of the COVID pandemic in the U.S., where daily infections topped the 150,000 mark less than a week after rising past 100,000. The city of Chicago, meanwhile, issued a four-week 'stay-at-home' order aimed at taming the spread of the virus, with officials in New York mulling similar restrictions in the country's biggest metropolitan area.
And while breakthrough vaccine data from Pfizer Inc. (PFE) - Get Report earlier this week, as well as a potentially similarly effective drug from Moderna Inc. (MRNA) - Get Report provided a solid boost to both markets and sentiment this week, Federal Reserve Chairman Jerome Powell cautioned yesterday that while both developments were "good and welcome news" it remains "too soon to assess with any confidence the implications ... for the near term".
Friday's market reaction, however, suggests investors are ready to get ahead of any vaccine deployment, with world stocks rising 1.3% on the week to take the value of all tradeable equity markets past the $95 trillion mark for the first time in history.
U.S. equity futures, meanwhile, look set for a solid Friday open following better-than-expected quarterly earnings from two Dow components last night -- Cisco Systems Inc (CSCO) - Get Report and Walt Disney Co (DIS) - Get Report -- with contracts tied to the 30-stock average indicating a 215 point gain.
Futures contracts linked to the S&P 500, which is up 8.17% for the month and 9.5% for the year, are priced for a 26 point opening bell gain while those tied to the Nasdaq suggest a 90 point advance for the tech-focused benchmark.
The U.S. dollar index, which trades the greenback against a basket of six global currencies, was marked 0.17% lower at 92.806 in overnight trading, while benchmark 10-year U.S. Treasury note yields were trading at 0.896% after hitting a seven-month high of 0.98% earlier this week.
Global oil prices were modestly lower, however, despite the U.S. dollar weakness after Energy Department data showed a surprise 4.3 million barrel increase in domestic crude stocks. Friday's pullback, however, sill keeps crude prices on pace for their second consecutive weekly gain.
WTI crude futures contracts for December delivery, the U.S. benchmark, traded 38 cents lower from their Thursday close in New York and were changing hands at $40.74 per barrel in early European dealing, while Brent contracts for January delivery, the global benchmarked, edged 26 cents higher to $43.27 per barrel.
In Europe, the Stoxx 600 added to recent gains with an early 0.22% advance, even as data showed a smaller-than-expected quarter on quarter GDP gain of 12.9% over the three months ending in September that widened the year-on-year contraction to 4.4%.
Overnight in Asia, Japan's Nikkei 225 snapped an 8-day winning streak with a 0.53% pullback that pegged the benchmark at 25,385.87 points as coronavirus cases in the world's third-largest economy jumped to a record 1,634, while the region-wide MSCI ex-Japan index gained 0.48% despite weakness in China stocks linked to a ban on U.S. investment in companies linked to the military.