European stocks rose on Tuesday, buoyed by optimism that vaccines will end the coronavirus pandemic, as well as signs of an orderly transition in the U.S.
Though down 6% year-to-date, the Stoxx Europe 600
rose 0.6%. Investors again bid up prices of oil producers including Total
continuing a streak in which the Stoxx oil and gas sector
has jumped 31% over the last month.
Futures on the Dow Jones Industrial Average
rose 297 points, after a 328-point gain for the blue chips on Monday. Futures on the Russell 2000
outperformed those of the Nasdaq-100
a sign of the preference for hard-hit small- and value stocks over the technology giants that have surged during the pandemic.
“The likely wide availability of a COVID-19 vaccine in the second half of 2021 underpins our expectation of a strong economic recovery next year following early weakness,” said Bénédicte Lowe, cross-asset strategist at BNP Paribas. “At the same time, monetary policy is likely to remain exceptionally accommodative. We expect this, along with an expansionary fiscal stance, to support economic activity.”
Election risk was further reduced as the head of the General Services Administration told the Biden team that the transition can formally begin, a move President Donald Trump endorsed in a tweet. President-elect Joe Biden is expected to formally name Janet Yellen, the former Federal Reserve chair who presided over an era of low interest rates and stock-market gains, as his Treasury secretary nominee.
Germany’s closely watched Ifo index fell to 90.7 points in November, compared with a downwardly revised 92.5 points in October, though it marginally beat economist expectations.
A sign of the optimism in markets came as catering company Compass Group
rose 6%, after reporting a 78% drop in fiscal year ending Sept. 30 adjusted earnings per share, and didn’t pay a final dividend. Rival Sodexo
Pets at Home
shares fell 3% after the pet supplies seller reported a 5% decline in underlying pretax profits for the first half. The stock is still up 95% over the last 12 months.
shares jumped 16% as Sweden’s SBB
said it would pay a 15% premium to Monday’s closing price for the Norwegian real estate company that’s partly held by the Norwegian government.