Global stocks edged higher in choppy trading yesterday as markets awaited further appointments to the incoming White House administration, while oil prices eased as tensions rose between Russia and the United States over Ukraine.
Investors are eyeing President-elect Donald Trump’s pick for Treasury secretary, with the pool widening to include Apollo Global Management Chief Executive Marc Rowan and former Federal Reserve Governor Kevin Warsh.
Markets are positioning for potential tariffs and tax cuts from the incoming Trump administration that could lead to higher inflation and to fewer interest rate cuts by the Federal Reserve. The yield on benchmark US 10-year notes fell 4.1 basis points to 4.373 per cent.
“I think it’s all the unknown; we’ve had the big unknown, which is how the election was going to go, now that’s known. But the next set of questions is what’s going to happen with Congress and with the White House,” said George Young, portfolio manager at Villere & Co in New Orleans.
“You can have less regulation and with it the possibility of more mergers and acquisition. The only thing that’s kind of a fly in the ointment is the bond market.”
Benchmark S&P 500 and the Nasdaq were trading higher with gains in technology stocks outweighing losses in materials, energy and healthcare equities. Artificial intelligence chipmaker Nvidia is scheduled to report earnings today.
The Dow Jones Industrial Average fell 0.40pc to 43,217.01, the S&P 500 rose 0.03pc to 5,895.43 and the Nasdaq Composite rose 0.38pc to 18,863.40.
President Vladimir Putin yesterday lowered the threshold for a nuclear strike in response to a broader range of conventional attacks. He approved the change after two US officials and a source familiar with the decision said that US President Joe Biden’s administration allowed Ukraine to use US-made weapons to strike deep into Russia.
Europe’s main stock index fell to a three-month low, as investors shifted from risky assets to safe havens amid heightened geopolitical tensions following Russia’s warning on its updated nuclear doctrine. The pan-European STOXX 600 dropped to as low as 495.55, it lowest since early August. It was last down 0.7pc. MSCI’s gauge of stocks across the globe was up slightly 0.15pc to 846.83.
“The market’s movement appears to be driven by this morning’s news about changes to Russia’s nuclear doctrine,” said Michael Weidner, co-head of global fixed income at Lazard Asset Management.
Oil prices dipped, with Brent crude futures down 0.12pc to $73.20 a barrel, while US West Texas Intermediate crude futures at $69.08 a barrel, down 0.14pc.
The Swiss franc rose around 0.20pc against the euro , while the dollar index – which tracks the US currency against six peers – was down 0.02pc to 106.20. Gold was last up 0.43pc at $2,623.48 per ounce after hitting a one-week high.
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