World stocks edge higher on vaccine hopes, dollar slips
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[November 18, 2020]
By Simon Jessop
LONDON (Reuters) - Global shares edged
higher and the dollar slipped on Wednesday as weak U.S. retail sales and
a surge of new coronavirus cases tempered market euphoria after recent
COVID-19 vaccine breakthroughs.
The MSCI World index was up 0.1% at 1013 GMT, just shy of the previous
session's record high.
After opening lower, European shares crawled back into the black, with
the STOXX 600 index up 0.3%, tracking overnight gains in Asia where
China stimulus hopes helped MSCI's broadest regional gauge rise
0.7%.[nL1N2I409V]
U.S. stock futures also pointed to firmer open on Wall Street, up 0.2%,
after soft U.S. retail sales data, a rise in COVID-19 cases and
uncertainty over fresh stimulus measures in the world's largest economy
had sapped sentiment.
While the release of two successful coronavirus vaccine trial data over
the last week had buoyed markets, the still-high infection rate globally
had acted to trim gains, said Jane Shoemake, London-based fund manager
at Janus Henderson.
![](http://archives.lincolndailynews.com/2020/Nov/18/images/ads/current/bestfriends_sda_TIP_2020.png)
"People can see light at the end of the tunnel now and the markets
clearly responded to that, but it's not going to go up in a straight
line because we've still got to get through the winter... (and) that is
going to continue to temper some of the exuberance people feel."
Concern about the still-high infection rate in the United States acted
to crimp dollar demand, with the greenback sliding against a basket of
currencies to its lowest since Nov. 9.
That had followed weak retail sales data overnight and comes as hopes
for fresh U.S. stimulus remain hampered by political gridlock, pinning
near-term hopes on action from the U.S. central bank. []
Strong corporate earnings in the third quarter also continued to
underpin the positive stock market sentiment, said analysts at Barclays,
with firms "confident on the outlook and in control of costs", they said
in a note to clients.
"This reinforces the case for a strong earnings rebound and pick-up in
corporate activity in 2021, as the cyclical recovery unfolds."
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![](../images/111820PIX/news_p31.jpg)
A man wearing a protective face mask is reflected on a stock
quotation board outside a brokerage, amid the coronavirus disease
(COVID-19) outbreak, in Tokyo, Japan November 10, 2020. REUTERS/Issei
Kato
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Cormac Weldon, Head of U.S. Equities at UK asset manager Artemis
said while the overall picture for investors was brighter, the
recovery was likely to be uneven.
"Low inventories and the need to manufacture and distribute goods
are likely to be the first drivers of the recovery, with the
re-emergence of consumer demand adding a powerful second phase."
With stocks still well supported, other risk markets also took
heart, with U.S. crude futures and Brent crude futures both up just
over 1%, bolstered by hopes OPEC will delay a planned increase in
production.
Safe haven gold, meanwhile, was down 0.3% at $1,872.6 an ounce, with
U.S. gold futures also slightly lower.
In Europe's debt markets, Germany saw its benchmark 10-year
government bond yield fall to its lowest since Pfizer announced its
COVID-19 vaccine update a week and a half ago.
"Yields continue to grind lower as more warning signs flash about
the near-term outlook," said Benjamin Schroeder, senior rates
strategist at ING.
![](http://archives.lincolndailynews.com/2020/Nov/18/images/ads/current/chicagost_sda_FFARM_2020.png)
"Euro zone spreads appear to have eyes only for QE (quantitative
easing), shrugging off volatility and EU setbacks," he said,
referring to news this week that Hungary and Poland have blocked the
adoption of the 2021-2027 budget and recovery fund by European Union
governments.
(Editing by Kim Coghill, Larry King and Toby Chopra)
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