Stock Futures indicates the extension of the record setting rally

Stocks are rising more in the last days of the year, driven in part by cheap money unleashed by central banks and governments to protect the global economy from the coronavirus pandemic. The S&P 500 index has risen by more than 15% this year, building on 29% growth in 2019, while the Nasdaq Composite Index has gained more than 43% in 2020 alone.

“Some people get carried away by the race for recordings. Market momentum pushes and exceeds these record highs, ”said Carsten Brzeski, global head of macro research at ING Groep.

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“These are fictitious thresholds, but the benchmarks can live their own lives and this is happening now.”

Trading volumes are also usually lower in the last days of the year, with many people on holiday, which can amplify market movements.

Investor sentiment also gained momentum after the House on Monday passed a bill proposing to increase the size of stimulus controls to $ 2,000 from $ 600. The measure is now heading to the Senate, where its fate is uncertain. Senate Majority Leader Mitch McConnell (R., Ky.) Has not commented on whether he will take over the bill.

“Markets do not necessarily consider potential growth as such, but there is joy about the possibility of intensifying it. This is partly on price, ”said Mr Brzeski.

The WSJ dollar index, which tracks the US currency against a basket of others, fell 0.3% to its lowest level in weeks.

In the bond markets, the yield on the 10-year reference Treasury rose to 0.945%, from 0.932% on Monday.

Meanwhile, the coronavirus pandemic continues to rise, with hospitalization rates in the United States peaking on Monday. Intensive care units are also under pressure.

“There is this combination of blockages, the spread of the virus and new strains, but investors continue to emphasize the flow of positive news in this regard,” said Jeroen Blokland, head of multi-sector at Robeco.

Abroad, the pan-continental Stoxx Europe 600 added 0.9%.

In the UK, where markets reopened on Tuesday, the main benchmark for FTSE 100 shares rose 2.2% as investors cheered the post-Brexit deal on Christmas Eve. British and European Union officials have reached an agreement that includes a free trade agreement, ending more than four years of uncertainty.

“The Brexit agreement will contribute to sentiment risk. As investors return to the office for the first time at Christmas, people are looking for the details of the deal, ”said James Athey, investment manager at Aberdeen Standard Investments.

Among European stocks, AstraZeneca rose by 4.4% in reports that the pharmaceutical company’s Covid-19 vaccine could be approved by the British government in the coming days.

British banks were among the weakest performers in London, with Lloyds Banking Group down almost 4%, Barclays down 2.8% and NatWest Group down 2.7%. It is not entirely clear how the Brexit agreement will affect financial services.

In Asia, most major benchmarks rose with the close of trading. The Japanese Nikkei 225 index rose 2.7%, ending the day at a 30-year high. The Hong Kong Hang Seng Index added 1%, while the Shanghai Composite Index fell 0.5%.

“The momentum in Asian stocks shows that this vaccine-driven rally is becoming global,” Mr Blokland said. “For 2021, we are quite uphill, we believe that the economic recovery will resume [the first quarter] and US stimulation will help. “

Write to Anna Hirtenstein at [email protected]