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U.S. Stocks Decline Amid Fed Dispute With Treasury: Markets Wrap

This content was published on November 20, 2020 - 21:01

(Bloomberg) -- The S&P 500 Index extended a weekly decline as traders weighed a conflict between the White House and Federal Reserve over emergency lending programs along with assurances that the government has plenty of room to help the economy.

The benchmark equity gauge slumped in the wake of the disagreement over releasing government funds to further shore up growth, even as Treasury Secretary Steven Mnuchin said he will try to revive stimulus talks with congressional Democrats. Pfizer Inc. rose after filing for emergency approval of its Covid-19 vaccine. Gilead Sciences Inc. fell after authorities advised against using its remdesivir drug to treat Covid-19.

The Stoxx Europe 600 Index posted its third week of gains -- the best streak since July -- amid a rotation into economically sensitive sectors. Mining and energy firms led the gauge higher Friday.

Global stocks hit a record Monday, but have eased off the highs in a choppy week of trading, with investors now analyzing the rare show of discord between Mnuchin and Fed Chair Jerome Powell that erupted amid a resurgence of virus cases and with months to go before a vaccine is widely available. The S&P 500 posted a 0.8% weekly decline.

“This public spat between the Fed and the Treasury is not a very good sign for the markets,” said John Praveen, managing director at QMA. “It kind of casts a shadow on market confidence.”

Mnuchin said lawmakers should redirect unspent stimulus funding, including money he’s pulling back from the Fed. But the Fed pushed back, saying the programs served a vital role.

In other markets, Asian equities climbed. Precious metals gained. Bitcoin advanced past $18,500.

These are the main moves in markets:

Stocks

  • The S&P 500 index fell 0.7% as of 4 p.m. in New York.
  • The Stoxx Europe 600 index gained 0.5%.
  • The MSCI Asia Pacific Index rose 0.5%.
  • The MSCI Emerging Market Index advanced 0.7%.

Currencies

  • The Bloomberg Dollar Spot Index was little changed.
  • The euro slipped 0.1% to $1.1859.
  • The pound rose 0.2% to $1.3288.
  • The yen slipped 0.1% to 103.82 per dollar.

Bonds

  • The yield on 10-year Treasuries was little changed at 0.83%.
  • Germany’s 10-year yield dipped one basis point to -0.585%.
  • The U.K.’s 10-year yield fell two basis points to 0.3%.

Commodities

  • West Texas Intermediate crude rose 1% to $42.15 a barrel.
  • Gold rose 0.4% to $1,873.21 an ounce.

©2020 Bloomberg L.P.

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