Stocks climb while dollar falls as markets cheer US Treasury pick
(Removes extraneous word 'the' in paragraph 9, reinstates dropped word 'was' in paragraph 16)
By Sinéad Carew and Nell Mackenzie
NEW YORK/LONDON : MSCI's global equities gauge rose and the dollar fell with U.S. government bond yields on Monday as investors welcomed the incoming U.S. President's selection of fund manager Scott Bessent as the next U.S. Treasury Secretary.
Wall Street indexes gained ground, with the S&P 500 and the Dow touching record highs as investors were encouraged by Donald Trump's pick for the top economic job. Some cited a focus on tax cuts and others bet he would be fiscally cautious.
U.S. Treasury yields fell sharply as investors speculated on a more moderate than feared U.S. fiscal trajectory.
"What we're in is a Trump rally. Markets like a Republican because they figure taxes aren't going up and hopefully will go down," said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.
And the fact that the President-elect has already created his cabinet suggests he will be "up and running early," said Ghriskey, adding that the market was viewing the Treasury Secretary pick as a positive even with concerns about tariffs.
In an interview published on Sunday, Bessent told the Wall Street Journal that both tax and spending cuts were priorities.
Bessent had told CNBC earlier in November, before his selection as Treasury secretary, that he would recommend "tariffs be layered in gradually."
At 11:19 a.m. the Dow Jones Industrial Average rose 404.35 points, or 0.91 per cent, to 44,700.86, the S&P 500 rose 25.98 points, or 0.44 per cent, to 5,995.36 and the Nasdaq Composite rose 112.30 points, or 0.59 per cent, to 19,116.04.
MSCI's gauge of stocks across the globe rose 4.80 points, or 0.56 per cent, to 858.93 and Europe's STOXX 600 index rose 0.21 per cent.
The European index had hit a two-week high, boosted by the Bessent nomination and comments from the European Central Bank chief economist on monetary policy easing.
In a trading week shortened by Thursday's U.S. Thanksgiving holiday, key events will be the release of October Personal Consumption Expenditures (PCE), the latest GDP estimate, and U.S. Federal Reserve minutes are due on Tuesday.
Markets still expect a Fed cut next month, though rate-cut bets have been dialled back in recent weeks.
In Treasuries, the yield on benchmark U.S. 10-year notes fell 11.3 basis points to 4.298 per cent, from 4.41 per cent late on Friday while the 30-year bond yield fell 12.1 basis points to 4.4742 per cent.
The 2-year note yield, which typically moves in step with interest rate expectations, fell 5.8 basis points to 4.311 per cent, from 4.369 per cent late on Friday.
In currencies, the dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.02 per cent to 106.95.
Against the Japanese yen, the dollar weakened 0.23 per cent to 154.39 and the euro was up 0.7 per cent against the dollar at $1.049.
The euro had fallen sharply this month on worries over Trump tariffs, deteriorating economic conditions and signs of an escalation in Russia/Ukraine war.
Oil prices fell after Axios reported that Israel and Lebanon had agreed to the terms of a deal to end the Israel-Hezbollah conflict, citing an unnamed senior U.S. official.
U.S. crude fell 3.03 per cent to $69.08 a barrel and Brent fell to $73.09 per barrel, down 2.75 per cent on the day.
Bitcoin fell 0.9 per cent to $96,145.00 after Friday hitting a record of $99,830 on bets on a friendly regulatory environment for cryptocurrencies under Trump.
Gold prices fell sharply, breaking a five-session rally, as reports of Israel nearing a ceasefire with Hezbollah, coupled with Trump’s Treasury Secretary pick, tarnished demand for the safe-haven precious metal.
Spot gold fell 2.93 per cent to $2,633.10 an ounce. U.S. gold futures fell 2.56 per cent to $2,640.40 an ounce.
(This story has been refiled to remove extraneous word 'the' in paragraph 9 and reinstate dropped word 'was' in paragraph 16)
