European stocks turn higher and Dow futures rise over 200 points as investors watch COVID-19’s spread

The Stoxx Europe 600 index
XX:SXXP
inched up 0.2%, but poised for a 5% gain this week. The German DAX 30
DX:DAX
and French CAC 40 index
FR:PX1
rose 0.4% and 0.5%, respectively, while the FTSE 100
UK:UKX
slipped 0.1%.

U.S. stock futures
YM00

ES00

NQ00
rose 0.8% across the board, with Dow futures climbing over 200 points. On Thursday, the Dow
DJIA
dropped over 300 points, the S&P 500
SPX
fell 1%, and the Nasdaq Composite
COMP
slid 0.65%.

China became one of the last countries to congratulate President-elect Joe Biden on his election win. “We respect the choice of the American people,” said a foreign ministry spokesman, Wang Wenbin. “We congratulate Mr. Biden and (vice presidential running mate) Ms. (Kamala) Harris.”

Read: Other news organizations finally call Arizona for Biden

The administration of President Donald Trump signed an executive order banning Americans from investing in Chinese companies deemed high risk with links to the country’s military.

Investors endured an up-and-down week that started with enthusiasm after positive COVID-19 vaccine news from drugmaker Pfizer
PFE
and partner BioNTech
BNTX.
That drove investors into the so-called value trade — stocks beaten down by the pandemic that would benefit from signs of a strengthening economy.

“Global markets appear trapped between conflicting drivers, with rampant optimism for a vaccine painting a brighter picture for next year, but surging infections and fading prospects of powerful fiscal stimulus keeping the animal spirits in check,” said Marios Hadjikyriacos, investment analyst at XM in a note to clients.

“Investors can now see the light at the end of the covid tunnel, but there is still a long and taxing grind before we get there,” he added.

News of surging U.S. hospitalizations and record infection levels this week, alongside expectations that a stimulus package won’t arrive in time to prevent further economic damage, returned to haunt investors by midweek.

“Many investors only expect a sustainable sector rotation from technology stocks as the pandemic winners to the spurned losers only when the vaccine cannot only be approved but also efficiently distributed in large numbers,” analysts at CMC Markets told clients in a note.

Europe has also grappled with climbing cases, though some governments appear not ready to ease up on lockdowns as hospitals are pushed to the limit. The U.K. reported another record rise in infections on Thursday, while the French Prime Minister Jean Castex said it would be “irresponsible” to ease up on a strict lockdown even as the reproductive number has fallen under the key 1 level. A rise above that indicates the pandemic is spreading.

In a report on Thursday, JPMorgan expressed optimism that lockdowns in Europe have been working and economies should be able to reopen in time for December holidays. But in Sweden, citizens have been told to prepare for possible travel restrictions during the holiday period. French and Irish authorities have said they cannot yet say whether citizens can make holiday travel plans.

Data showed the eurozone economy regained some of the jobs lost to spring coronavirus lockdown measures during the three months through September.

Among stocks on the move for Friday, shares of Engie
FR:ENGI
rose nearly 5% after the French utility said operating income fell for the first nine months of the year, as it took a €1 billion ($1.18 billion) hit from the pandemic. But Engie stuck to guidance for 2020 net recurring income and capital expenditure.

Tech names were gaining, with business software group SAP
XE:SAP

SAP
up 2.3% and chip equipment provider ASML Holding
NL:ASML

ASML
rising 1.5%.