Markets rally on big technology stocks

Stocks climbed as giant tech companies rallied in a shift back again to the safety trade that has powered this year’s gains amid speculation the monetary recovery will be slow with a virus resurgence.

The S&P 500 rose to the best since September 2, as the Nasdaq 100 jumped a lot more than 2 %. Heavyweights Apple and Amazon surged alongside some stay-at-home shares which were hit hard by this week’s selloff such as Zoom.

The Dow Jones Industrial Average underperformed, and banks slumped. The Russell 2000 Index of smaller stocks halted a two-day rally which was driven by expectations a return to normal would be on the horizon after positive vaccine developments. Treasury futures were little changed, with the money market closed for a US holiday. The dollar advanced.

With fears of further economic pain growing amid the risk of tougher measures to support the virus, traders piled back into companies with solid balance sheets and a suite of products that benefit from social distancing.

New York City’s average of people testing positive for Covid-19 is approaching the safety threshold that could force a shutdown of schools, with the mayor citing one “last chance” to prevent another wave. The pandemic has killed more than 1.2 million persons around the world since late January and sent the economy into the worst recession in living memory.

“We are still likely to maintain for a slower economic growth environment,” said Leo Grohowski, chief investment officer at BNY Mellon Wealth Management. “We're able to see some reopening rollback as the Covid case counts continue steadily to climb.”

As the recent rotation into cheaper value stocks slowed up on Wednesday, JPMorgan strategists said the shift into those companies can endure a lot longer after years of lagging behind growth shares. There’s still room for further normalisation as a sizable the main initial rally was driven by the short-covering of short-momentum strategies - which choose the past year’s winners and sell its losers, according to them.

“Our equity strategy team believes that people are on the cusp of a sustained rally in value much like what we saw in 2016-2017,” said strategists including Davide Silvestrini and Marko Kolanovic. “This rotation has room to keep much further given the material underperformance we've witnessed recently.”

Elsewhere, talks between Opec and its own allies are zeroing in on a delay to next year’s planned oil-output increase of three to six months, according to many delegates. Saudi Arabia and Russia, leaders of the 23-nation coalition, have already indicated publicly that they are reconsidering easing production cuts in January as the resurgent pandemic hits fuel demand.

These are a few of the key moves in markets: