Global stocks rise as hopes for prompt US fiscal stimulus revive the ‘buy everything’ trade
Global stocks rose on Monday as investors held onto hopes for a prompt deal on a new round of US fiscal stimulus, boosted by the White House’s change in position over the weekend.US stock futures rose as much as 1%, even after House Speaker Nancy Pelosi rejected the Trump administration’s latest proposal on Sunday.In Asia, China stocks rose to a two-year peak, driven by a new central bank policy that makes it easier to sell the yuan.The FTSE 100 edged slightly lower ahead of Prime Minister Boris Johnson’s expected announcements on stricter COVID-19 restrictions across the country.Visit Business Insider’s homepage for more stories.
Global stocks rose on Monday as investors largely pinned hopes on a new US fiscal stimulus deal to get across the line.
US stock futures rose as much as 1% even after House Speaker Nancy Pelosi rejected the Trump administration’s latest proposal, or a stripped-down version of the coronavirus relief bill, calling it “grossly inadequate” over the weekend. The dollar index, meanwhile, fell 0.5%.
President Donald Trump’s team proposed a $1.8 trillion stimulus package, which includes a $400 boost in weekly unemployment insurance, $1,200 stimulus checks for US adults, and $1,000 checks for every child.
The MSCI World Index rose 0.7% as global markets rotate into a risk-seeking position and investor hopes persist that a fiscal stimulus package is on the horizon. But House Democrats appear to be sticking to their original $2.2 trillion plan.
“Even if the White House capitulates, getting that number through the Senate will be challenging,” said Jeffrey Halley, a senior market analyst at OANDA. “With markets now totally ignoring the possibility of a fiscal stimulus package not happening and piling into the ‘buy everything’ trade, the correction if negotiations fall apart could be something to behold.”
London’s FTSE 100 fell 0.2%, ahead of a slew of new COVID-19 restrictions across the country from Conservative Prime Minister Boris Johnson following an explosion in new cases. Britain already has the highest death rate in Europe.
In Asia, China’s benchmark index jumped to a two-year peak, after the People’s Bank of China unveiled a new policy that makes it easier to short the yuan, which was down almost 1% against the dollar.
The central bank no longer requires lenders to hold reserves when buying foreign currency forward contracts. The yuan’s appreciation is likely to resume after these measures run their course, OANDA’S Halley said.
Gold rose 0.2% to $1,929 an ounce, lifted by a weaker dollar. Gold’s firmness points to “positive technical developments that should signal further gains in the week ahead,” Halley said.
Read more: SPACs have generated a $39 billion frenzy in the US this year. The executive behind their first ETF explains how retail investors can use them to level the playing field with Wall Street titans like Warren Buffett.
Read the original article on Business Insider
Original Source: feedproxy.google.com
Visited 153 Times, 1 Visit today