US stocks edge higher as vaccine progress leads to optimism

Tech shares among best performers on S&P 500

US stocks edged higher as vaccine progress boosted optimism in one of the final trading sessions of 2020.

Tech shares were among the best performers in S&P 500 Index.

Travel and leisure companies advanced in the Stoxx 600 Index after the UK approved a coronavirus shot by AstraZeneca and the University of Oxford. Volumes were light during the holiday week, with European shares seeing about half of the usual activity. Bitcoin extended its record-breaking rally, approaching $28,000.

Investors have pushed stocks to sky-high valuations this year on expectations that widespread vaccine distribution in 2021 will reignite economic growth and boost corporate profits. The US government has started sending Americans $600 payments for pandemic relief, but discouraging news came with the discovery that the more infectious Covid-19 variant from the UK has arrived in Colorado.


"Investors continue to weigh stimulus hopes against negative pandemic developments," Tom Essaye, a former Merrill Lynch trader wrote to clients. "Markets have aggressively priced in a lot of positive resolution to these events (and more) in 2021."

With a volatile year coming to a close, risk assets such as stocks, corporate bonds and Bitcoin are sitting at or near record highs. The MSCI World Index of global stocks is set to end the year about 14 per cent higher, having surged almost 68 per cent since its March low.

On the coronavirus front, a second cluster of infections emerged in Sydney. US President-elect Joe Biden criticised vaccine-distribution efforts under President Trump as too slow. UK Prime Minister Boris Johnson has approved placing further swathes of the country into stricter Tier 4 restrictions, according to the Times.

Elsewhere, Bloomberg’s dollar gauge fell to its lowest since April 2018 as traders squared currency positions ahead of the year’s end amid thin liquidity. Emerging-market stocks reached the highest level since 2007 on buoyant inflows. Treasuries and gold were little changed. – Bloomberg L.P.