U.S. and European Stocks Fluctuated on Friday. Why’s That?

Stock markets were cautious this week as traders assessed valuations after a record jump in equities this month. The Covid-19 cases continue rising in parts of Europe and the U.S. In addition, Oil tumbled down due to increasing tensions among OPEC+ members.

On Friday, futures on the S&P 500 climbed higher. Treasuries also soared, while the U.S. dollar headed for a second weekly plunge. Market volumes will likely end lower than average today with reduced trading hours for U.S. futures and bonds.

In Europe, the Stoxx Europe 600 index fluctuated. Banco de Sabadell SA tumbled down after ending talks with Banco Bilbao Vizcaya Argentaria SA. Meanwhile, Electricite de France SA surged forward by as much as 7.7% after reports said that the EU and France are close to reaching a deal on nuclear regulation.

Overall, the S&P 500 futures gained 0.2% on Friday, while the Stoxx Europe 600 index changed insignificantly. The MSCI Asia Pacific Index soared by 0.2%, but the MSCI Emerging Markets Index was also little changed.

Thus far, global stocks remain on track for the best month on record, trading higher by 13%. The recent rally pushed valuations to near the highest in almost 20 years. Despite that, the sentiment is still fragile as the coronavirus toll continues to increase in Europe and the U.S. Global economic recoveries struggle. Investors hope that a swift rollout of vaccines changes that, but there are logistical challenges to consider.

What do the analysts say?

Nannette Hechler-Fayd’Herbe, Credit Suisse’s chief investment officer for international wealth management, stated that to see whether the market will continue to have legs, people will have to have confirmation of those vaccine hopes. So, very quickly now they want to see approvals, they want to see production outlooks as far as the Covid-19 vaccines’ broader distribution is concerned.

Meanwhile, political clarity has boosted risk assets this month. President Donald Trump announced that he would relinquish power if the Electoral College affirms Biden’s win. However, he also hinted that he may never formally concede defeat, and may even skip the Democrat’s inauguration. Recently elected President Joe Biden continues his transition to power.

U.S. stock market will close at 1 p.m. on Friday due to celebrations. The week ends with Black Friday, which is the traditional start of the United States’ holiday shopping season.

In China, new data showed profits as industrial enterprises rallied at the fastest pace in a single month in nearly nine years in October. That’s a further sign of the country’s economic recovery’s gathering pace.