World stocks boast record-breaking month, led by Europe

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World shares were set to seal a record-busting month on Monday as the prospect of a vaccine-driven global economic recovery next year and yet more free money from central banks eclipsed concerns about the pandemic in the near-term.

FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, November 25, 2020. REUTERS/Staff

Many European bourses are boasting their best month ever with France up 21% and Italy almost 26%. The MSCI measure of world stocks is up 13% for November so far, while the S&P 500 has climbed 11% to all-time peaks. “However, we are now in a seasonally strong time of year and investors are yet to fully discount the potential for a very strong recovery next year in growth and profits as stimulus combines with vaccines.”

Sweden’s Riksbank surprised last week by expanding its bond purchase program and the European Central Bank is likely to follow in December.Federal Reserve Chair Jerome Powell testifies to Congress on Tuesday amid speculation of further policy action at its next meeting in mid-December. The euro has caught a tailwind from the relative outperformance of European stocks and climbed 2.7% for the month so far to reach $1.1964. A break of the September peak at $1.2011 would open the way to a 2018 top at $1.2555.

 

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