Stocks rally to end bitter week; dollar up the most since April
Send a link to a friend
[September 26, 2020]
By Rodrigo Campos
NEW YORK (Reuters) - Stocks fell 2% around
the globe this week and the dollar posted its strongest weekly
performance since April as concern over the economic effect of a second
wave of coronavirus-related lockdowns weighed on investors' risk
But tech stocks led the way higher on Wall Street on Friday, as they
have of late on days governed by worries over the economic recovery. The
gains more than offset losses in Europe and an index of major stock
markets globally rose 1% on the day.
Other than COVID-19 angst, the week was dominated by speculation over
the likelihood of another stimulus package to support the American
"There's evidence of a slowdown in the United States, which we think is
temporary, but it would be reinforced if there is no additional fiscal
package," said Sebastien Galy, senior macro strategist at Nordea Asset
On Wall Street, the Dow Jones Industrial Average rose 358.52 points, or
1.34%, to 27,173.96, the S&P 500 gained 51.87 points, or 1.60%, to
3,298.46 and the Nasdaq Composite added 241.30 points, or 2.26%, to
The S&P posted four consecutive weekly losses, the longest such streak
in over a year. It is down nearly 6% in September.
The pan-European STOXX 600 index lost 0.10% and MSCI's gauge of stocks
across the globe gained 1.03%. Despite Friday's strong gains, the global
index fell 2% for the week.
Emerging market stocks rose 0.13%. MSCI's broadest index of Asia-Pacific
shares outside Japan closed 0.51% higher, while Japan's Nikkei rose
0.51% to end a three-day week.
Treasuries remained little changed in a week where the 10-year yield
traded in a 5-basis-point range.
"Overall the market remains fairly range-bound. There is some intraday,
intra-week volatility that when you really look at it, we just don’t go
anywhere," said Justin Lederer, an interest rate strategist at Cantor
Benchmark 10-year notes last rose 3/32 in price to yield 0.6561%, from
0.664% late on Thursday.
But the relapse in sentiment has hit emerging market debt, especially
countries with weak credit ratings. Argentina's newly restructured bonds
have lost around 25% in under a month, making it the worst return to
markets since Greece in 2012, while plenty of other countries have seen
China's government bonds gained acceptance into one of the world's most
coveted bond benchmarks, the FTSE Russell WGBI. CGBs will be introduced
late next year.
[to top of second column]
The German share price index DAX graph is pictured at the stock
exchange in Frankfurt, Germany, September 18, 2020. REUTERS/Staff
In currency markets, the dollar index climbed for the fourth time
this week and set its strongest weekly showing since April.
The dollar index rose 0.315% on Friday, with the euro down 0.39% to
The Japanese yen weakened 0.16% versus the greenback at 105.59 per
dollar, while sterling was last trading at $1.2741, down 0.06% on
JB Mackenzie, managing director of futures and forex at TD
Ameritrade, sees increasing volatility ahead of the Nov. 3 U.S.
election and as a result, more demand for the dollar.
"The election and stimulus and the continued economic recovery,
those three parts, if those are not working lock step, there very
well could be a movement to the dollar as that flight to safety
trade," said Mackenzie.
The Russian rouble sank 1.2% to a near six-month low of 78.23 to the
U.S. dollar. Geopolitical concerns further weighed on Russian assets
with the threat of sanctions over the poisoning of Kremlin critic
Alexei Navalny, in which Moscow denies wrongdoing. The crisis in
neighboring Belarus also continued to linger.
The dollar's strength this week has also battered commodities, with
gold on track for its biggest weekly drop in at least six. On
Friday, spot gold dropped 0.4% to $1,861.46 an ounce.
Silver tumbled 14% this week, a drop not seen in over six months.
The spot price fell 1.33% to $22.90 on the day.
Oil prices fell for the day and week mostly due to mounting worries
about the impact on fuel demand of a widespread resurgence in
U.S. crude recently fell 0.5% to $40.11 per barrel and Brent was at
$41.86, down 0.19% on the day.
(Reporting by Rodrigo Campos; additional reporting by Marc Jones and
Noah Browning in London, Laila Kearney, Sinéad Carew and Chuck
Mikolajczak in New York and Devik Jain in Bengaluru; Editing by
Chris Reese, Steve Orlofsky and Tom Brown)
[© 2020 Thomson Reuters. All rights
Copyright 2020 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.