US Waver stocks to begin 2021

Investors are starting the new year on an optimistic note, amid expectations that widespread distribution of coronavirus vaccines will allow economic activity to return to pre-pandemic levels. Stocks were boosted a few weeks ago on such a bet even as the pandemic spreads, with hospital levels in the U.S. climbing to its highest Sunday.

“There is still some bad news about the virus, but the market is looking through that because of the vaccines,” said Fahad Kamal, chief investment officer at Kleinwort Hambros. “We are certainly tightened, with the expected economic recovery, historically low interest rates, high fiscal spending and forthcoming monetary policy: all that is still likely.”

In pre-sale trading, Tesla rose 2% after the electric car maker said it delivered 499,550 cars last year, just shy of its half-million target.

Flir Systems rose nearly 23% after Teledyne Technologies agreed to acquire a sensor technology maker in a deal valued at about $ 8 billion.

New data on the health of the manufacturing sector added to the fog on Monday. Factories in Asia and Europe increased their output as 2020 drew to a close, according to surveys of purchasing managers that showed a strong rise in activity in December. The results of a similar study by U.S. manufacturers, to be published at 9:45 m ET, are expected to indicate a strong increase in activity.

“We are going through refurbished locks, which reduce activity to some extent, but what we have seen through the pandemic is that manufacturing activity tends to be well maintained, ”Said Sebastian Mackay, multi-asset fund manager at Invesco. “The manufacturing PMIs we receive today are likely to be very strong and give a strong indication that the economy is recovering.”

In bond markets, the yield on the 10-year Financial Indicator note rose to 0.930%, from 0.913% at 31 December.

The dollar weakened, with the WSJ Dollar index down 0.4%.

Paul Sandhu, head of multiasset size solutions for the Asia-Pacific region at BNP Paribas Asset Management, said he expected the dollar to continue to weaken, under pressure to some extent with a potential increase in U.S. spending on infrastructure and other potential stimulus measures.

Abroad, the pan-continental Stoxx Europe 600 rose 1.4%.

The UK FTSE 100 was the top-performing index in Europe, jumping 2.7%. The trade deal struck on Christmas Eve between the UK and the European Union appears to be boosting British stocks, Mr Mackay said.

“Many tails are at risk without a contract [Brexit] removed now. This will get people starting to dip their toes again in the UK market, ”he said.

Among European equities, British gaming company Entain rose more than 29% after confirming an offer to take over from MGM Resorts International.

The offer values ​​the company at £ 8.09 billion, equivalent to $ 11.06 billion.

Most stock benchmarks in the Asia-Pacific region came up before the end of the trading day. South Korea’s Kospi Composite gains led, rising nearly 2.5%.

China Composite gained 0.9% before the end of trading, even after a private survey showed that China’s manufacturing activity modeled in December due to weak demand for the country’s exports.

Ben Luk, chief multiasset strategist at State Street Global Markets, said the data indicated continued volatility in the Chinese economy. But he said that helped alleviate concerns that China’s central bank would work prematurely to tighten monetary policy.

Strengthen the Chinese yuan, to trade below 6.5 per dollar, in the tightly controlled onshore market with no signs of state-backed institutions stepping in to halt the rally, Ken said Cheung, chief Asian foreign exchange strategist at Mizuho Bank in Hong Kong. Mr Cheung said that this showed that Chinese authorities were comfortable with more respect, which in turn helped to gain more power in money both on land and offshore.

“Many investors are also confident that China’s growth story will remain as other major global economies struggle with the pandemic,” Mr Cheung said, adding that China’s growth and assets could accelerate. with a higher yield pushing the currency to 6.3 yuan a dollar in the first. half of this year. The Yuan has traded less than 6.5 dollars since the start of the 2018 trade war.

Japan’s Nikkei 225 fell 0.7% before the end of trading, and the yen strengthened against the dollar, after Prime Minister Yoshihide Suga said it could declare a state of emergency in Tokyo and surrounding areas as new coronavirus infections rise .

Mr Sandhu said markets in Asia had largely picked up where they left off in 2020, as investors continue to favor more risky assets as equities in emerging markets such as China, South Korea and Taiwan. He said he expected Asia to be one of the strongest segments of global markets, in part due to the success of the introduction of the coronavirus.

Bitcoin, the most popular cryptocurrency, paid for some of the benefits it recorded during the New Year holidays. It rose from less than $ 29,000 on New Year’s Eve to a high above $ 34,500 on January 3, according to CoinDesk data. On Monday, it stood at around $ 31,515.

“Investors across the globe are looking for new asset classes to invest in and bitcoin looks very attractive because it is an unrelated asset class,” Mr Sandhu said.

Write to Joanne Chiu at [email protected] and Anna Hirtenstein at [email protected]