The Thursday Market Minute
- Global stocks rally, following the biggest post-election surge in Wall Street history, as former Vice President Joe Biden looks set to win the White House.
- Biden holds a 254-214 Electoral College lead, with votes still to be counted in Georgia, Pennsylvania, Arizona and Nevada.
- Trump files lawsuits to stop counting in certain states, but markets appear comfortable with a Biden win that's tempered by Republican control of the Senate
- European stocks hit a two-week high despite record rises in coronavirus cases as Britain begins its four-week lockdown.
- The Bank of England boosts its QE program by £150 billion, but makes little reference to taking rates into negative territory.
- Weekly jobless claims fall to 751,000, but come in just above Street forecasts of 735,000.
- Wall Street futures suggest a firmer open following solid earnings from Bristol-Myers and General Motors and ahead of a Federal Reserve rate decision at 2:00 pm Eastern time.
U.S. equity futures extended gains Thursday, following the biggest post-election surge on record, as investors positioned for a decisive result from the Presidential race for Democratic challenger that looks to be tempered by Republican control of the Senate.
Futures pared gains, however, after weekly jobless claims data showed that 751,000 Americans filed for unemployment benefits last week, down from 787,750 over the prior period but ahead of Street forecasts of 735,000.
Former Vice President Biden, 77, is holding on to a 264 to 214 lead in presumptive Electoral College votes, with tallies still to be confirmed in key states such as Georgia, Nevada and Pennsylvania, all of which would need to turn for President Donald Trump to give him any chance of reaching the 270 Electoral Vote threshold.
Trump's campaign team has filed suits in Pennsylvania and Georgia to stop counting certain votes, and is also seeking a re-count in Wisconsin, a Blue Wall state declared for Biden yesterday, but investors have largely ignored post-election disputes on the assumption of a firm and decisive mandate for the former Vice President in the coming days.
In fact, Wall Street is on its best three-day run since April following yesterday's gain, the biggest jump for the Dow since June, and looks set to power higher into the tail end of the corporate earnings season.
The broader economic impact of a winter resurgence in coronavirus infections, however, looms large, with cases rising at more than 100,000 per day in the U.S., as well as at record levels in Europe, where Britain begins a four-week lockdown later today and Germany struggles with a surge in hospitalizations.
Those concerns are likely to find themselves front-and-center in the thoughts of Federal Reserve policymakers as the central bank prepares for its November rate decision later today.
No changes are expected from Chairman Jerome Powell -- who is likely to remain in his role under a Joe Biden Presidency -- but investors will be keen to see if growth and rate projections have changed now that the COVID pandemic has extended into the winter months with little hope of a vaccine before the end of the year.
For the moment, however, a clean and uncontested election result is set to power Wall Street higher heading into the Thursday session, with futures contracts tied to the Dow Jones Industrial Average indicating a 330 point opening bell gain and those linked to the S&P 500 priced for another 55 point advance.
General Motors (GM) - Get Report shares were a notable pre-market mover, rising 6.2% after the carmakers smashed third quarter earnings forecasts thanks in part to improving sales in China and robust domestic demand for pickups and SUVs.
Nasdaq Composite futures, meanwhile, are suggesting a 300 point surge as investors pare concerns for significant regulations on big tech companies from a gridlocked Congress while adding to bets on further growth for the sector in the face of a longer-than-expected period of at-home work amid the lingering coronavirus pandemic.
Tech stocks, in fact, helped boost European markets to a two-week high in early Thursday trading, as regional benchmarks added to gains despite gains for both the euro and the pound and ongoing worries over the potential for a double-dip recession linked to coronavirus shutdowns.
The U.S. dollar index was marked 0.8% lower against a basket of it global peers at 92.633 as traders pared bets on a significant stimulus agreement from a divided Washington, while benchmark 10-year Treasury note yields slipped to 0.753.%.
The Stoxx 600 benchmark jumped 0.8% in the opening hours of trading in Frankfurt, while the FTSE 100 in London added 0.5% as the pound rose to 1.3046 following the Bank of England's policy decision that boosted its bond-buying program by £150 billion but made little-mention of negative rates.
Oil prices were modestly in the red, however, despite a weaker U.S. dollar and data from the Energy Department yesterday that showed a huge 8 million barrel decline in domestic crude stocks as markets keyed on a late November meeting of OPEC ministers that could scrap a planned increase in production from the cartel members in January.
WTI contracts for December delivery, the U.S. benchmark, traded 28 cents lower from their Wednesday close in New York and were changing hands at $38.87 per barrel in early European dealing while Brent contracts for January, the new global benchmark, were seen 18 cents lower at $41.05 per barrel.
Overnight in Asia, Japan's Nikkei 225 rode Wall Street's recent rally to close 1.7% higher on the session at 24, 105.38 points, the highest in two years, while the region-wide MSCI ex-Japan benchmark was last seen 2.5% higher heading into the final ho