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GLOBAL MARKETS-World stocks catch breath after vaccine euphoria

Published 11/18/2020, 05:09 PM
Updated 11/18/2020, 05:10 PM
© Reuters.
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* MSCI World index flat, just off record high
* U.S. retail sales highlight fragile recovery
* German 10-yr debt yield lowest since Pfizer vaccine
* Dollar dips to Nov. 9 lows against basket of currencies

By Simon Jessop and Hideyuki Sano
LONDON/TOKYO, Nov 18 (Reuters) - Global shares were little
changed and oil rose on Wednesday as weak U.S. retail sales and
a surge of new coronavirus cases dampened but did not extinguish
the euphoria from recent COVID-19 vaccine breakthroughs.
The MSCI World index .MIWD00000PUS was flat at 0823 GMT,
just shy of the previous session's record high.
European shares opened lower, with the STOXX 600 index
.STOXX down around 0.1%, tracking weakness overnight in Japan,
where the Nikkei .N225 fell 1.1% after coronavirus cases there
rose to a high. Elsewhere in Asia, the picture was more mixed. MSCI's
broadest gauge of regional shares .MIAPJ0000PUS rose 0.6%,
helped by better handling of the pandemic in much of the region
and the prospect of more stimulus in China. U.S. stocks fell overnight on the sales data and rise in
COVID-19 cases, but were expected to hold steady at the Wall
Street open on Wednesday, with S&P500 futures ESc1 flat.
"Overall, the picture for investors is brighter, but the
recovery is likely to be uneven," said Cormac Weldon, Head of
U.S. Equities at UK asset manager Artemis.
"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."
The market caution was reflected in other risk markets, with
U.S. crude futures CLc1 up just 0.1%. Brent crude futures
LCOc1 were up 0.4%.
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.
"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.

RETAIL SALES
The retail sales report released by the U.S. Commerce
Department showed spending decelerating as the holiday shopping
season approached, amid a lack of fresh fiscal relief from
Washington. A skittish mood also swept investors as several U.S. states
began restricting gatherings and mandating face-coverings after
more than 70,000 Americans were hospitalized for treatment of
COVID-19.
The surge in new coronavirus cases comes as investors have
hailed two promising vaccine trial results published earlier
this month.
"We're are coming out of a solid two weeks, so the market
being down half a percent isn't that bad with the prospect of
COVID lockdowns," said Jamie Cox, managing partner for Harris
Financial Group.


U.S. Federal Reserve Chairman Jerome Powell noted the
current surge in coronavirus cases is a big concern, and the
economy will continue to need both fiscal and monetary policy
support. Against a basket of currencies, the dollar =USD fell to
92.250, its lowest since Nov. 9.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
COVID-19 https://tmsnrt.rs/3lKwe14
COVID-19 Global Tracker COVID-19 Global Tracker https://tmsnrt.rs/2FkV6wq
U.S. retail sales https://tmsnrt.rs/2Uz7jkY
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Editing by Kim Coghill, Larry King)

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