Sector movers: Oil&Gas stocks and Banks pace gains
By Alexander Bueso
Date: Wednesday 02 Dec 2020
(Sharecast News) - Commodity and financial stocks were again at the top of the leaderboard in the middle of the week, helped by ongoing optimism around the macroeconomic outlook for 2021.
Oil&Gas stocks paced the advance, helped by reports of 'progress' in negotiations among OPEC+ country delegates ahead of the cartel's summit the next day.
Backstopping risk appetite too was news overnight that a bipartisan group of US Congressmen had tabled a $908bn proposal for a fourth stimulus package.
Financial services and banks benefitted from that news, together with another move higher in longer-term US Treasury yields.
At the market close the yield on the benchmark 10-year note was three basis points higher at 0.96%.
Echoing the buoyant underlying investor sentiment in financial markets, Alberto Gallo at Algebris explained to clients how global policymakers had rolled-out a 'triple-punch' against Covid-19, including the upcoming vaccine, super-low interest rates and record-high fiscal stimulus.
Thanks to that mix of factors, most companies even in stressed sectors such as travel, transport and tourism had been able to gather more than a year of liquidity, Gallo said.
Indeed "with a successful vaccine, even those sectors could bounce back next year," he said.
However, there was a caveat, Gallo added, the yield on the benchmark 10-year US Treasury note remained below 1% - despite the new Democratic administration in the US and its plans to implement more fiscal stimulus.
"Are bond investors underestimating the chances of a stronger recovery - or has a decade of central bank QE pushed the last bond vigilantes to surrender?"
Top performing sectors so far today
Mining 20,965.23 +3.84%
Oil & Gas Producers 4,709.96 +3.83%
Financial Services 11,751.73 +2.85%
Automobiles & Parts 3,705.69 +2.47%
Banks 2,665.10 +2.23%
Bottom performing sectors so far today
Forestry & Paper 18,929.48 -1.87%
Food & Drug Retailers 4,155.10 -1.82%
Household Goods & Home Construction 17,182.84 -1.68%
Insurance (non-life) 3,264.75 -1.25%
Leisure Goods 24,143.61 -1.12%
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