Dollar Dips, Gold Climbs; Stocks Hold Near Record: Markets Wrap

The dollar slipped and global stocks held near a record as trading got underway in Asia on Monday. Gold and Treasury yields climbed.

Shares rose in Australia but slid in Japan. S&P 500 futures fluctuated after the benchmark closed at an all-time high on Dec. 31. Most markets around the world were shut on Jan. 1. Bitcoin held onto much of its weekend gains after topping $34,000 for the first time on Sunday.

China’s stocks will be in focus as Chinese oil majors may be next in line for delisting in the U.S. after the New York Stock Exchange said last week it would remove the Asian nation’s three biggest telecom companies.

Equities are beginning the new year at rich valuations amid expectations that widespread vaccine distribution in 2021, central bank support and government aid will reignite economic growth and boost corporate profits. An MSCI index of world stocks ended at a record in 2020 after rising 14% last year.

“Stock markets are headed higher and they are headed higher without the old traditional valuation techniques” as long as the Fed “keeps the liquidity bubble going.

Elsewhere, oil slipped. OPEC warned of risks to the oil market from the resurgent pandemic. The alliance of producers led by Saudi Arabia and Russia will decide on Monday whether it can continue to restore crude supplies without capsizing the price recovery.

On the coronavirus front, the U.S. vaccine rollout is picking up speed after a slow start and could be fully on track within a week or so, said Anthony Fauci, the nation’s top infectious disease expert. U.S. daily coronavirus cases soared to a record of nearly 300,000 after the holidays, while global cases hit 85 million. U.K. Prime Minister Boris Johnson said tougher lockdown measures in England will probably be needed.

What to watch this week:

  • OPEC+ alliance energy ministers hold their monthly virtual gathering Monday to decide whether to add as much as 500,000 barrels a day to production.
  • China Caixin manufacturing PMI due Monday.
  • In the U.S. Tuesday, the state of Georgia holds a run-off election for two U.S. Senate seats that will decide control of the chamber.
  • U.S. Congress meets to count electoral votes and declare the winner of the 2020 Presidential election Wednesday.
  • FOMC minutes out Wednesday.
  • U.S. unemployment report for December is due Friday.

These are the main moves in markets:

Commodities

  • West Texas Intermediate crude fell 0.2% to $48.44 a barrel.
  • Gold added 0.7% to $1,911.90 an ounce.

Stocks

  • S&P 500 futures slipped 0.1% of 9:35 a.m. in Tokyo. The S&P 500 Index advanced 0.6% Thursday.
  • Japan’s Topix index dipped 0.9%.
  • Australia’s S&P/ASX 200 rose 0.9%.

Currencies

  • The yen climbed 0.1% to 103.07 per dollar.
  • The offshore yuan rose 0.1% to 6.4940 per dollar.
  • The Bloomberg Dollar Spot Index fell 0.1%.
  • The euro climbed 0.2% to $1.2241.
  • The British pound was steady at $1.3664.

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