Global stocks rise as Wall Street record trumps growth nervousness

LONDON (Reuters) – European stocks edged higher on Wednesday, as a record high for US stocks offset simmering concerns over a resurgence in coronavirus cases that could undermine a nascent recovery.

The broad Euro STOXX 600 gained 0.1% in volatile trading, with indices from Frankfurt to London posting small gains.

On the bright side were travel and leisure shares, with British Airways owner up 3.7% on a UK plan using COVID-19 testing at London’s Heathrow Airport to help reduce the number days travelers must spend in quarantine.

But oil and gas, utilities and mining stocks weighed, with BP and Royal Dutch Shell losing around 0.6% as crude prices fell amid concerns over demand and rising cases of COVID-19 in Europe.

Early moves in Europe reflected a volatile session for Asian stocks, where losses on Chinese and Hong Kong stocks erased an earlier push to a seven-month high.

The broadest MSCI index of Asia-Pacific stocks outside of Japan fell 0.2%, after the initial support of an S&P 500 charge at an all-time high fueled by looser policy and a charge in equities technological.

Wall Street futures showed slim gains.

The strategist said the lukewarm performance in Europe and Asia was symptomatic of growing investor attention: where to put money before finding a vaccine for the coronavirus.

Money has poured into U.S. growth stocks – the tech giants and retail titans that have benefited the most from the recovery – as investors fear that without a vaccine, an increase coronavirus cases could still harm “value” stocks.

“This is hands down the biggest dilemma right now,” said Mike Bell, global market strategist at JP Morgan Asset Management.

“If you get a shot, you’re going to see a big rotation from stocks that have worked really well this year – growth stocks, tech stocks – to outdated value stocks – hotels, airlines.”

Overnight, US stocks set records as investors looked to the home winners of COVID-19 lockdowns such as Amazon and Netflix.

The benchmark S&P 500 broke its all-time high in February, reached just before the start of the COVID-19 pandemic, took stocks to their lowest on March 23.

It has jumped about 55% from those lows, fueled by monetary stimulus packages even as the alarm bells sounded over the underlying health of the economy and fiscal stimulus talks in Washington took hold. eternize.

GROUND DOLLAR

The intervention of the US Federal Reserve in financial markets to maintain liquidity has pushed riskier assets to unprecedented levels and reduced demand for safe-haven securities, hitting the US dollar.

In early trading, the greenback moved away from a 27-month low hit a day earlier, gaining 0.1% against a basket of currencies at 92.256.

“The US dollar left the building overnight,” said Jeffrey Halley, senior market analyst at Oanda, citing the prospect of further easing of Federal Reserve policy as the trigger.

Financial markets have “realized that the US government can issue as much debt as it wants.”

Markets have also paid close attention to the minutes of the recent Fed meeting, due later today, for any clues as to what the Fed may announce in September.

Some investors have speculated that the Fed will adopt a medium inflation target, which would seek to push inflation above 2% for a while.

In commodities, Brent futures fell 45 cents, or 0.6%, to $ 45.19 a barrel, amid fears that U.S. fuel demand may not recover as well quickly than expected in a context of stalled talks on an economic stimulus plan. [O/R]

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