Futures in stocks point to the extension of the record-breaking rally

Actions are rising in the last days of the year, driven in part by economic money unleashed by central banks and governments to protect the global economy from the coronavirus pandemic. The S&P 500 index has risen more than 15% this year, based on the 29% rise in 2019, while the Nasdaq composite index has gained more than 43% in 2020 alone.

“There are people who let themselves be carried away by the race for records. The market momentum is driving and surpassing these record highs, ”said Carsten Brzeski, global head of macro research at ING Groep.

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“They are fictitious thresholds, but benchmarks can live their own lives and that’s happening now.”

Trading volumes are also usually lower in the last days of the year, with many people on holiday, which can amplify market movements.

Investor sentiment also rose after the House on Monday passed a bill proposing to increase the size of stimulus controls to $ 2,000, from $ 600. The measure is now headed to the Senate, where its fate is uncertain. Senate Majority Leader Mitch McConnell (R., Ky.) Has not commented on whether he will accept the bill.

“Markets do not necessarily assume the potential increase, but there is joy about the possibility of increasing it. In part, a price is being set, ”said Brzeski.

The WSJ dollar index, which tracks the U.S. currency against a basket of others, fell 0.3% to the week’s lowest level.

In bond markets, the 10-year benchmark Treasury yield rose to 0.945% from 0.932% on Monday.

Meanwhile, the coronavirus pandemic continues to rise, with hospitalization rates in the U.S. rising to a high on Monday. Intensive care units are also under pressure.

“There’s this combination of blockages, the spread of the virus and new tensions, but investors continue to emphasize the positive news flow about it,” said Jeroen Blokland, head of Robeco’s multiasset.

Abroad, the pan-continental Stoxx Europe 600 added 0.9%.

In the UK, where markets reopened on Tuesday, the main benchmark of FTSE 100 shares rose 2.2% as investors hailed the post-Brexit deal held on Christmas Eve. British and European Union officials reached an agreement that includes a free trade agreement, ending more than four years of uncertainty.

“The Brexit deal will help risk sentiment. When investors return to the office for the first time since Christmas, people are studying the details of the deal,” said James Athey, investment manager at Aberdeen Standard Investments.

Among European stocks, AstraZeneca jumped 4.4% according to reports that the British government could approve the pharmaceutical company’s Covid-19 vaccine in the coming days.

British banks were among the worst performers in London, with Lloyds Banking Group falling by almost 4%, Barclays falling by 2.8% and NatWest Group falling by 2.7%. It is not entirely clear how the Brexit agreement will affect financial services.

In Asia, most major benchmarks increased at the close of trading. The Japanese Nikkei 225 index rose 2.7%, ending the day at a 30-year high. Hong Kong’s Hang Seng index added 1%, while Shanghai’s composite index fell 0.5%.

“The boost in Asian stocks shows that all this vaccine-motivated rally is globalizing,” Blokland said. “By 2021, we are quite bullish, we believe the economic recovery will start again [the first quarter] and the encouragement of stimuli outside the United States will help. ”

Write to Anna Hirtenstein to [email protected]