Investors cheer the news that a surge in coronavirus cases is easing
Wall Street indexes edged to fresh all-time highs overnight as investors continued to express optimism about further stimulus and economic recovery. Of note, the energy sector rallied more than 4% as Brent crude exceeded the $60 handle for the first time in more than a year. In individual stocks, American Airlines rallied nearly 3.5% as documents showed Democrats’ proposal could include $14 billion for the airline payroll assistance. Meanwhile, the S&P 500 rose and Dow Jones Industrial Average gained 0.75% each while the Nasdaq Composite climbed 0.95%.
Asian stocks were mostly higher on Tuesday, with market players continuing to cheer the news that a surge in coronavirus cases is easing while progress in distributing vaccines and hopes for US government stimulus adding to the upbeat tone in the markets. As such, the Shanghai Composite Index gained over 2% and the Nikkei 225 in Tokyo rose 0.4%. The Hang Seng in Hong Kong gained 0.57%. On the negative side, the Kospi in Seoul shed 0.2% and Sydney’s S&P/ASX 200 lost 0.86%.
In Europe, stocks were a touch lower at the start of the session in a sign that risk demand could be waning following the recent rally. Wall Street futures are also pointing to the latest rally losing a bit of steam after another record close overnight. The pan-European Stoxx 600 hovered fractionally below the flatline in early trade. At the start of the week, the EU has finalized a deal with Pfizer and BioNTech for the supply of an additional 300 million doses of their Covid vaccine.
Meanwhile, the dollar remains on the defensive against major counterparts on Tuesday, with EURUSD bearing the 20-DMA that arrives around the 1.2100 handle. However, the common currency could lack the recovery momentum to make a decisive break above this barrier in the short term, especially as risk sentiment has been deteriorating somehow during early hours in Europe. As such, downside risks continue to persist as long as the pair stays below the mentioned moving average.