Global stocks headed toward their best weekly gain since July on Friday after the White House signaled that it’s open to large-scale stimulus. U.S. futures surged forward. Contracts on the S&P 500 and Nasdaq 100 jumped after reports said President Donald Trump wants agreement on a comprehensive aid package.
Chipmaker Xilinx skyrocketed in the premarket due to news that it’s in talks for a $30 billion takeover by rival Advanced Micro Devices. Futures on the S&P 500 Index soared by 0.4% overall, while Nasdaq 100 Index futures jumped by 0.2%.
European stocks also rallied as a host of companies raised outlooks. From German online clothing retailer Zalando to Denmark’s drugmaker Novo Nordisk. Rolls-Royce surged forward with analyst recommendations continuing to come in. Its weekly advance already topped 100% after a capital increase. Furthermore, an Asian equity gauge increased for the fifth day. The Stoxx Europe 600 Index gained 0.2%, while the MSCI Asia Pacific Index climbed up by 0.1%.
On the other hand, stocks tumbled down in Spain after its government declared a state of emergency for Madrid to control the coronavirus pandemic. European bonds jumped, though, as virus cases also increased in the U.K. and Germany. Treasuries edged up, and the dollar lowered. Italy’s 10-year bond yield plummeted down to a record low.
What do analysts think?
It seems next week will be volatile with a mild risk-on attitude. Trump is recuperating from Covid-19 in the final stretch of the election campaign, so investors are increasingly betting a Joe Biden victory is likely. They also speculate whether Democrats will sweep Congress and then enact massive stimulus.
Strategists led by Peter Berezin at BCA Research stated that large-scale fiscal easing would push down the value of the greenback while giving bond yields a modest boost. Non-U.S. shares will outperform their U.S. peers, and value stocks will outperform growth stocks.