By Joe Wallace
U.S. stocks are on track to complete a banner November, giving
the Dow Jones Industrial Average its best month in over 33 years,
as investors cheer the prospect of Covid-19 vaccines halting the
pandemic and fresh stimulus spending to bolster the economy.
Futures tied to the Dow ticked down 0.5% Monday, signaling that
the blue-chips index will enter the final trading session of
November down about 140 points. The benchmark was up roughly 12.9%
month-to-date by the end of Friday.
Contracts linked to the S&P 500 slipped 0.2% at the start of
the week, though the broad index remains on track for what may be
its biggest one-month advance since April. Futures for the
Nasdaq-100 index edged up 0.2%, suggesting technology stocks will
Stocks have soared in November, at one point pushing the Dow
over 30000 for the first time and putting the benchmark on course
for potentially its biggest one-month advance since January 1987.
Shares in companies that had suffered most from the pandemic, such
as energy producers and banks, have posted steep gains.
The Russell 2000 index of small-cap stocks is also on pace for
its best month in data going back to 1987.
Two main factors have fueled the latest leg up in markets,
according to investors. The development of three vaccines in the
West has opened up the possibility that the economic disruption
caused by the coronavirus will end in 2021. Signs that
President-elect Joe Biden will make a relatively smooth transition
into the White House have doused some of the political uncertainty
that had fed into heightened market volatility in the fall.
Ahead of the bell in New York, Moderna jumped over 10%. The
drugmaker said it would ask U.S. and European health regulators on
Monday to authorize use of the company's Covid-19 vaccine.
Shares in S&P Global fell 2.5% in premarket trading after
the data provider said it would combine with IHS Markit in a deal
that values IHS Markit at $44 billion, including debt, confirming a
report by The Wall Street Journal. Shares in IHS Markit rose about
The looming rollout of vaccines is likely to keep stocks on an
upward trajectory in the final weeks of the year, investors and
The surge of coronavirus infections in the U.S. and the
possibility for logistical hiccups in the distribution of the shots
could lead to bouts of selling. Still, money managers expect
investors to view any declines as a buying opportunity.
"We've got a lot of very good vaccine news," said Daniel Morris,
chief market strategist at BNP Paribas Asset Management. "We
should, for the most part, move up between now and the end of the
year, with a chance for a setback here or there.
One risk for stocks in the coming months stems from exuberance
among individual investors, said Trevor Greetham, head of multi
asset at Royal London Asset Management, pointing to surveys by the
American Association of Individual Investors. Still, the U.K. asset
manager is betting that a revival in economic activity will
continue to buoy stock prices in 2021.
The prospect of vaccines offers "some light at the end of the
tunnel as an investor," Mr. Greetham said. "If you're buying
stocks, you're not just assessing the next month or two -- you're
assessing the next 20 years."
In bond markets, the yield on 10-year Treasurys ticked up to
0.844%, from 0.841% on Friday.
Brent-crude futures fell 1.1% to $47.72 a barrel, after reports
that ministers from the Organization of the Petroleum Exporting
Countries and its allies were yet to agree on delaying a boost to
production in January ahead of meetings Monday and Tuesday.
Traders broadly expect the cartel to extend output curbs into
2021 to bolster prices amid surging virus cases in the U.S. and
restrictions on travel in Europe.
In Asia, investors were rattled by a Reuters report that the
Trump administration is poised to add oil producer Cnooc and chip
maker Semiconductor Manufacturing International to a blacklist of
alleged Chinese military companies. Cnooc shares tumbled 14% in
Hong Kong, while SMIC's Hong Kong-listed stock fell 2.7%.
Most major markets in the region ended lower. Hong Kong's Hang
Seng lost 2.1%, Japan's Nikkei 225 retreated 0.8% and the Shanghai
Composite Index lost 0.5%.
Markets are concerned about more restrictions from the U.S. on
investing in Chinese companies, according to Steven Leung,
executive director of institutional sales at UOB Kay Hian in Hong
"Some investors would rather stay on the sidelines awaiting more
clarity on vaccine developments and U.S. policy directions as the
nation transits to new leadership," Mr. Leung said.
Banks and energy producers dropped in Europe, weighing on the
Stoxx Europe 600, which was roughly flat. Shares in UniCredit fell
almost 4% on reports that the board was holding talks about
governance at the Italian bank.
--Joanne Chiu contributed to this article.
Write to Joe Wallace at Joe.Wallace@wsj.com
(END) Dow Jones Newswires
November 30, 2020 08:20 ET (13:20 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.