Stocks slip after record rally; oil extends retreat

Bloomberg

US futures slipped and European stocks steadied on the last day of the month after record-breaking rally in global equity markets. Oil extended a retreat on signs of discord among Opec+ ministers.
The rotation that sent stocks to all-time highs showed signs of a slight reversal, with technology companies holding firm, while small-caps, banks and
energy producers were broadly lower. The MSCI Asia Pacific Index sank 1.6%, the biggest loss in a month. “I suspect that investors have become cautious after big gains in the last few weeks that were driven by the vaccine news,” said Peter Rosenstreich, head of market strategy at Swissquote Bank. “It’s a big positive as it’s really provided an endgame for Covid-19.”
Even with the small pullback, the overarching theme in equities is still the spectacular
rally that propelled the MSCI World Index to a 13% surge in November. With efforts for a vaccine making fast progress, investors have quickly started to price in the likelihood of a return to normalcy and faster economic growth.
Over the weekend, US Surgeon General Jerome Adams said the federal government hopes to quickly review and approve requests from two drugmakers for emergency approval of their Covid-19 vaccines.
The risk-on mood has hurt demand for haven assets. Gold extended a retreat on Monday and is on course for its largest monthly decline in four years. The dollar is poised for a 2.7% drop in November.
In other markets, oil dropped below $45 a barrel in New York on Monday. An informal meeting of Opec+ ministers didn’t reach an agreement on whether to delay January’s oil-output increase.
A full meeting of the cartel was planned for Monday.
Opec holds a virtual full ministerial meeting to make a final decision on whether a production supply hike should proceed as scheduled in January.
The Reserve Bank of Australia holds a policy meeting on Tuesday.
Federal Reserve Chairman Jerome Powell testifies before Congress on Tuesday and Wednesday.
The US employment report on Friday is expected to show more Americans headed back to work in November, though at a slower pace than last month.
Futures on the S&P 500 Index declined 0.5% as of 9:32 am London time. The Stoxx Europe 600 Index was little changed. The MSCI Asia Pacific Index declined 1.6%. The MSCI Emerging Market Index fell 1.3%.
The Bloomberg Dollar Spot Index was little changed at 1,141.97. The euro rose 0.1% to $1.1975. The British pound was little changed at $1.3306.
The Japanese yen weakened 0.1% to 104.24 per dollar. The yield on 10-year Treasuries gained less than one basis point to 0.84%. The yield on two-year Treasuries dipped less than one basis point to 0.15%. Germany’s 10-year yield rose one basis point to -0.58%. Britain’s 10-year yield decreased one basis point to 0.276%.
West Texas Intermediate crude declined 1.3% to $42.15 a barrel. Gold weakened 0.6% to $1,777.09 an ounce.