S&P 500 Futures drop below 3,800 as markets turn cautious ahead of Biden’s inauguration
|- S&P 500 Futures test two-day winning streak while reversing from the intraday top.
- Virus woes return to the table, Yellen’s commentary also probed bulls.
- High security in White House amid fears that Capitol Hill drama could be repeated.
- Hints off initial performance, more stimulus can propel sentiment.
S&P 500 Futures fail to extend the previous two-day uptrend beyond 3,800 while easing to $3,793 during early Wednesday. The risk barometer’s recent weakness could be traced from the fears of the coronavirus (COVID-19) vaccine shortage and US Treasury Secretary Janet Yellen’s speech. Also challenging the mood could be the cautious mood before the key event in the White House.
Following Yellen’s indirect challenge to China and US President Donald Trump’s investment proposals, bulls stepped backward even as the ex-Fed Chair signaled another stimulus package from the Democratic Party during the next month.
On the other hand, New York Governor Bill De Blasio expects to run out of the vaccine, which in turn challenges the US vaccination drive and combat the pandemic. On the same line, record daily covid-led deaths in the UK and extended lockdown in Germany also recalled the virus woes.
It should be noted that the economic calendar remained silent during Asia with Aussie Westpac Consumer Confidence and the rate decision from the People’s Bank of China (PBOC) be the only major event. While Australian sentiment data dropped below +4.1% prior to -4.5%, PBOC holds its monetary policy unchanged with a 3.85% interest rate.
Amid these plays, stocks in the Asia-Pacific region trade mixed whereas the US 10-year Treasury yields also struggle for a clear direction near 1.09% by press time.
Looking forward, inflation data from the UK, Europe and Canada will entertain markets before highlighting Biden’s speech in the White House. While the Democratic Party member is likely to reconfirm his support for the covid battle, any clear hints over the fiscal aid package will be welcomed by the investors.
Read: Biden inauguration & Bank of Canada: the odds of a micro cut
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