Equities keep climbing on hopes that COVID-19 vaccines will lead to a powerful economic recovery later this year
Wall Street stocks ended Friday’s session mostly lower after a round of records earlier in the week. On the data front, the IHS Markit services PMI rose to a two-month high of 57.5 in January from 54.8 in the prior month, while a survey for the manufacturing sector climbed to a record 59.1 from 57.1. on the other hand, U.S. existing home sales in December increased less than 1% to 6.76 million. As a result, the Dow Jones Industrial Average lost 0.57%, the S&P 500 index closed 0.30% lower, and the Nasdaq Composite Index gained 0.1%.
Asian stocks were mostly up on Monday on hopes that COVID-19 vaccines will lead to a powerful economic recovery later this year. On the negative side, the Chinese government has reimposed travel controls after outbreaks in Beijing and other cities ahead of February’s Lunar New Year holiday. As such, Japan’s benchmark Nikkei 225 gained nearly 0.7%, Australia’s S&P/ASX200 added 0.36%, South Korea’s Kospi gained 2.18%. Hong Kong’s Hang Seng jumped 2.4%, while the Shanghai Composite gained nearly 0.5%.
In Europe, stocks opened higher to start the day, mirroring the optimism in US futures ahead of key events to watch out for in trading this week, including the Federal Reserve meeting due on Wednesday and fresh earnings reports while the World Economic Forum kicks off in a digital format on Monday.
Meanwhile, the dollar came back under some pressure on Monday, fading somewhat from Friday’s decent advance as risk demand prevails at the start of the week. EURUSD has settled above the 1.2150 area but still refrains from a recovery above the 1.2200 handle, being capped by the 20-DMA. In the near term, the pair needs to overcome this barrier in order to see a more robust recovery following the recent downside correction.
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