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Stocks edge higher as Biden victory looms
Global stock markets edged higher and the dollar sank to a two-month low as investors waited for the
final vote processing in the U.S. presidential election.
In Europe, treasury yields rose on better-than-expected October employment data, while oil prices
slid below $40 a barrel as new lockdowns to halt the surging COVID-19 pandemic dimmed the
demand outlook.
MSCI’s all-country world stock index rose 0.25% to 592.84, adding to a week-long rally in which the
benchmark for global equity performance advanced almost 8% to post its best week in nearly seven
months. The index also topped highs last seen in September.
The broad pan-regional FTSEurofirst 300 index closed down 0.12% to 1,418.13, while emerging
market stocks rose 0.96% in Europe.
Biden expanded narrow leads over President Donald Trump in the battleground states of
Pennsylvania and Georgia, but Georgia ordered a recount that could lead to a long period of
uncertainty. Biden was expected to address the nation Friday evening, in what could be a victory
speech.
Stocks on Wall Street rebounded from early profit-taking from the week’s big gains to close little
changed as a Biden presidency appeared inevitable and a sense of resignation settled in at the White
House.
“It’s more certain that we’re going to have Biden as president and more importantly we won’t have
Trump as there’s so much unpredictability with Trump,” said Tim Ghriskey, chief investment strategist
at Inverness Counsel in New York.
“The unpredictability of a president makes investing in any area that he can potentially touch, like
China, fraught with risk. All a sudden China is a less risky investment without Trump,” Ghriskey said.
Trump vowed to continue his legal fight and said in a statement, “I will never give up fighting for you
and our nation.”

The Dow Jones Industrial Average fell 0.24%, the S&P 500 lost 0.03% and the Nasdaq Composite
added 0.04%. For the week the Dow rose 6.87%, the S&P 500 7.33% and the Nasdaq 9.02%. All three
posted their best weekly percentage gains since April.
However, a surge in coronavirus cases globally has put a damper on the recovery outlook and investor
enthusiasm that had embraced a scenario of Republicans retaining control of the Senate during a
Biden administration.
“The market perhaps is starting to cheer there being some certainty to the election,” said Subadra
Rajappa, head of U.S. rates strategy at Societe Generale in New York.
The 10-year U.S. Treasury note’s yield rose 4.4 basis points to 0.8218%.
“There was some skittishness to the bond market when elections were too close to call. So the risk
premium associated with a prolonged election uncertainty gets priced out,” Rajappa said.
Michael Englund, chief economist at Action Economics in Boulder, Colorado, said the U.S.
unemployment report raised the prospect for fourth-quarter growth, putting upward pressure on
bond yields.
The U.S. unemployment rate fell to a lower-than-expected 6.9% from 7.9% in September, while
growth in private payrolls blew past the consensus estimate, adding 906,000 jobs, especially in the
hard-hit leisure and entertainment sector.
“Overall, it was a very encouraging report. The job market is pretty broadly recovering and recovering
better than most forecasters have expected,” said Russell Price, chief economist at Ameriprise
Financial Services Inc in Troy, Michigan.
But a 638,000 increase in nonfarm payrolls was the smallest gain since a jobs recovery started in May,
a sign the economy still needed stimulus.
Italy’s 10-year yield hit a record low of 0.603% on expectations of further stimulus.
With COVID-19 raging in the United States and parts of Europe, many investors assume more central
bank stimulus is inevitable.
The Bank of England expanded its asset purchase scheme on Thursday, while the Federal Reserve
kept its monetary policy loose and pledged to do whatever it takes to sustain a U.S. economic
recovery. The European Central Bank is widely expected to announce more stimulus next month.
Overnight in Asia, Japan’s Nikkei average rose 0.9% to a 29-year high while MSCI’s broadest gauge of
Asian Pacific shares outside Japan rose 0.3%, near a three-year high.
In currency markets, lower yields undermined the dollar, with the dollar index touching a two-month
low of 92.182. It fell 0.436%, with the euro up 0.48% to $1.1878.
The Japanese yen strengthened 0.21% versus the greenback at 103.28 per dollar.
Spot gold prices rose 0.19% to $1,952.26 an ounce. U.S. gold futures settled up 0.3% at $1,951.70.
Crude prices fell about 4% as fresh lockdowns in Europe to contain the coronavirus darkened the
outlook for oil.
Brent crude futures settled down $1.48 at $39.45 a barrel. U.S. crude futures fell $1.65 to settle at
$37.14 a barrel.
Sourced Reuters
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