The Tuesday Market Minute
- Global stocks extend gains, with record highs in Asia, as President Elect Joe Biden's transition team is granted access to briefings and funding by the White House.0
- President Donald Trump vows to continue 'fight' November election result, but many see decision as the first sign of a formal concession.
- Media reports suggest former Fed Chair 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 recent rally to trade at the highest levels since early March on renewed energy demand bets following vaccine breakthroughs in the U.S. and Europe.
- Wall Street futures point to another solid 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 higher Tuesday, while oil prices rose to the highest levels since early March, as markets reacted to signals of an election loss concession from President Donald Trump and the potential appointment of Janet Yellen as Treasury Secretary.
Trump, who continues to allege -- without evidence -- that the November election was riddled with fraud and insisting he should be named the winner, said late Monday that President elect Joe Biden and his incoming administration will be granted access to funding, security briefings and other administration apparatus that will allow for a smoother transition of power on January 20.
While stopping short of a full concession, and vowing to continue to "fight' his clear election loss, Trump's move does at least remove one of the market's key concerns with respect to a contested election result.
Biden, meanwhile, is set to name former Federal Reserve Chairwoman Janet Yellen as Treasury Secretary, according to multiple media reports, a move investors will likely interpret as indicative of the President elect's ambitions with respect to stimulus spending.
With Biden's now feet firmly planted on the White House lawn, and drugmakers in the U.S. and Europe establishing successful coronavirus vaccines heading into the final weeks of the year, stocks look set for another leg higher Tuesday in the hopes of a return to some form of 'normal' in the first quarter of 2021.
Futures contracts tied to the Dow Jones Industrial Average suggest a 325 point opening bell gain for the 30-stock benchmark, taking it to within touching distance of the 30,000 point barrier, while those linked to the broader S&P 500 are indicating a 30 point advance that would test the 3,600 point level.
Nasdaq Composite futures, meanwhile, suggest a modest 50 point opening bell gain for the tech-focused benchmark, which is up an astonishing 36.3% for the year.
Tuesday's pre-market session is expected to be busy with October house price data at 9:00 am Eastern time and third quarter earnings from Best Buy (BBY) - Get Report, Dollar Tree (DLTR) - Get Report and HP Inc. (HPQ) - Get Report
With around 95% of the benchmark reporting so far, third quarter earnings are likely to fall 6.7% from last year, according to Refinitiv data, and are forecast for another 11% decline over the three-months ending in December.
Oil prices were also on the march, rising to the highest levels since the global pandemic began to spread in early Spring, as investors bet on renewed energy demand, and ongoing OPEC supply restrictions, heading into next year.
WTI crude futures contracts for January delivery, the new U.S. benchmark, traded 59 cents higher from their Monday close in New York and were changing hands at $43.65 per barrel in early European dealing, while Brent contracts for January delivery, the global benchmark, rose 49 cents to $46.55 per barrel.
European stocks, as well, were looking at solid early gains, even as the euro tested the 1.1900 level against a softer U.S. dollar, following a stronger-than-expected third quarter GDP reading out of Germany, the region's largest economy, and a move by the British government to introduce coronavirus testing for foreign visitors that will eliminate the need for a two-week quarantine.
The Stoxx 600 benchmark, the region's broadest measure of share prices, was marked 0.55% higher in mid-day trading in Frankfurt, while Britain's FTSE 100 added 1.05% on the strength of solid gains for oil and energy stocks.
Germany's DAX performance index, meanwhile, was marked 0.92% higher following a statement from exchange operator Deutsche Boerse, which revealed plans to expand the benchmark from 30 stocks to 40 by the first quarter of next year, the biggest shake-up since in the index was formed in 1988.
Overnight in Asia, Japan's Nikkei 225 returned from its Monday Thanksgiving holiday to roar 2.5% higher on the session, lifting the regional benchmark to 26,165.59 points, the highest since May 1991. The region-wide MSCI ex-Japan index, meanwhile, added 0.37% to trade at a fresh record high of 632.80 points heading into the final hours of trading.