Stocks hit all-time high with Biden transition, vaccines light up outlook

LONDON / TOKYO (Reuters) – Global equities hit record highs on Wednesday after the Dow Jones broke through 30,000, investors relieved by the prospect of a smooth transfer of power after the U.S. presidential election and confident the a COVID-19 vaccine would be ready soon.

President-elect Joe Biden presented his foreign and national security policy team on Tuesday after President Donald Trump paved the way for preparations for the start of his administration.

Reports that Biden planned to appoint former Federal Reserve Chairman Janet Yellen as Treasury Secretary, potentially facilitating the passage of a fiscal stimulus package to counter the damage caused by COVID-19, also have applauded the markets.

Renewed demand for shares pushed MSCI’s broadest measure of global stocks to a record high of 622.12. It was the last increase of 0.1%

European stocks Euro STOXX 600 followed suit, gaining 0.1% early in the session to hold close to their nine-month highs as bank stocks gained ground and then retreated.

In Asia, Japan’s Nikkei hit a 29-year high. The MSCI index of Asia-Pacific stocks outside Japan was down 0.2% as Chinese stocks were capped by concerns over rising debt defaults.

The Dow Jones Industrial Average on Tuesday crossed 30,000 for the first time on Tuesday Futures for the S&P 500 added 0.2%.

“The world will be a lot better this time around next year than it is now, and that’s what the stock markets are reflecting,” said Mike Bell, global market strategist at JP Morgan Asset Management. “The point is, the outlook has changed dramatically over the past month.”

Ease the pain

Amid the improved outlook, investors are betting that upcoming virus vaccines will ease the pain of industries hardest hit by the pandemic, from tourism to energy.

Global energy stocks have risen nearly 34% so far this month, on track for their best month on record as crude prices rebound.

Oil prices have remained near their highest levels since March thanks to the improving global economic outlook. Brent futures rose 1.3% to $ 48.48 a barrel, last peaking in March.

These risk movements also occurred in the bond markets. Eurozone benchmark debt yields fell from historically low levels. German Bund yields traded near their highest levels in almost a week. Yields rise when bonds fall.

US Treasuries have also come under pressure, with investors betting that any fiscal stimulus package in Washington would lead to more debt.

Riskier currencies gained against safe havens, including the US dollar. Against a basket of six currencies, the dollar fell 0.1% to 92.048 after falling 0.4% on Tuesday.

The Australian dollar hit its highest level since early September, already helped by investors loosening their bets on further monetary easing.

The yen, a safe haven in times of political and economic stress, was little changed at 104.38 to the dollar.

Yet even in a risky climate, bitcoin remained stable at $ 19,179, staying within sight of its record high of $ 19,666 after gains of nearly 40% in November.