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Stock Rally Set to Extend in Asia; Dollar Slumps: Markets Wrap

A global equity rally looked set to extend in Asia on Friday as investors bought into technology and health-care firms on bets the U.S. election results mean no major tax hikes or regulatory changes that could derail those sectors. The dollar slumped to its lowest in more than two years.

The S&P 500 rose almost 2% and is headed for its best week since April. The tech-heavy Nasdaq 100 surged closer to 3%, pushing its advance this week to more than 9%. Futures in Japan and Hong Kong pointed to modest gains and Australian shares opened higher.

Federal Reserve officials kept interest rates near zero and made no change to asset purchases while stressing that the U.S. economy needs more fiscal and monetary policy support. Gold surged, while Treasuries were little changed. The yen strengthened past the closely watched 104 per dollar level.

“We’re seeing a resumption in leadership from technology,” said Tracie McMillion, head of global asset allocation strategy for Wells Fargo Investment Institute. “It appears markets really like the combination they think is most likely in terms of leadership going forward and that would be a Biden presidency with a Republican Senate.”

Meanwhile, vote counting continues in a handful of key states, with Democrat Joe Biden potentially needing to win just one to unseat President Donald Trump. The president added a lawsuit in Nevada to challenges in Michigan, Pennsylvania and Georgia, but lost some initial rulings.

Illinois, Ohio and Utah reported record Covid-19 infections and New York’s new cases approached a six-month high as Fed Chair Jerome Powell warned that mounting coronavirus infection rates are a risk to the recovery. France warned of a “violent” second wave as it joined European countries including Italy and Poland in reporting new highs in daily infections.

Elsewhere, Uber Technologies Inc. and Peloton Interactive Inc. both fell in after-hours U.S. trading. Bitcoin climbed by more than $1,000 to over $15,000, more than doubling its value in 2020. Oil ticked lower.

These are some key events coming up:

  • The U.S. non-farm payrolls report is due Friday.
  • Earnings are due from companies including Toyota Motor Corp.

These are some of the main moves in markets:

Stocks

  • S&P 500 futures were little changed as of 8:03 a.m. in Tokyo. The gauge rose 2% on Thursday.
  • Futures on Japan’s Nikkei 225 gained 0.6%.
  • Hang Seng futures climbed 0.3%.
  • Australia’s S&P/ASX 200 Index gained 0.7%.

Currencies

  • The Bloomberg Dollar Spot Index fell 1%.
  • The yen was at 103.60 per dollar.
  • The offshore yuan traded at 6.6101 per dollar.
  • The euro bought $1.1823.

Bonds

  • The yield on 10-year Treasuries held at about 0.77%.
  • Australia’s 10-year yield rose one basis point to 0.75%.

Commodities

  • West Texas Intermediate crude fell 0.6% to $38.54 a barrel.
  • Gold was at $1,946.64 an ounce after surging 2.5% on Thursday.

— With assistance by Claire Ballentine, Dave Liedtka, and Jeremy Herron

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