US equities moved higher on Wednesday, after retreating during the previous session. The upbeat mood prices in investors' hope that 2021 will be a much better year for the economy, which may be pushed by COVID vaccine rollouts and more stimulus.

Expectations for bigger direct payments faded after Senate Majority Leader Mitch McConnell turned down a quick vote to approve President Donald Trump's request to boost relief checks from $600 to $2,000.

Still, the massive $2.3 trillion stimulus package signed by Trump in the weekend is enough to support the bullish stance.

The Dow Jones rose 0.24% to update the record high. The S&P 500 added 0.13%, and Nasdaq rose 0.15%. Eight out of 11 S&P sectors moved higher, with energy and materials being the best performers. Trading volumes are much lower during the holidays.

The S&P 500 has gained about 15.5% year-to-date, driven by massive stimulus implemented by the government and cash injections from the Federal Reserve. In the final quarter, the rally was fueled by the vaccine news.

Nasdaq is set to record its best yearly performance in over a decade, with FAANG stocks being in the spotlight.

Investor sentiment was boosted after the UK approved the emergency use of the COVID vaccine produced by AstraZeneca and Oxford University. The first shots will be administered on Monday. Still, investors are worried about the new COVID strain first discovered in the UK. The first cases in the US have been confirmed in Colorado.

In Asia, stocks are mostly bullish during their last trading day of 2020. The optimism is supported by the UK's approval of the COVID vaccine produced by AstraZeneca and expectations of a global economic recovery in 2021.

At the time of writing, China's Shanghai Composite is up 1.30%, and the Shenzhen Component has surged 1.38%. Chinese factory activity increased at a slower pace, according to data released earlier in the day. Manufacturing PMI came in at 51.9 in December, down from November's 52.1 figure and slightly lower than forecasts. The data also showed that non-manufacturing PMI came in at 55.7 in December, also down from November's 56.4.

Hong Kong's Hang Seng Index is up 0.43%.

In Australia, the ASX 200 tumbled 1.42%.

Markets in Japan and South Korea are closed ahead of the New Year.

In the commodity market, oil prices are somewhat bearish after opening higher. The concerns over the new COVID strain offset the optimism surrounding the UK approval of AstraZeneca's vaccine. Both WTI and Brent have lost 0.10% so far. Initially, prices were boosted by data released by the Energy Information Administration (EIA), which showed a draw in crude inventories of over 6 million barrels last week. Investors expected a draw of over 2.5 million barrels. Previously, the American Petroleum Institute reported a draw of almost 4.8 million barrels. 2020 has been a tumultuous year for crude prices, which have declined about 20% since the beginning of the year. At one point, WTI futures turned negative for the first time ever, as demand tumbled. Nevertheless, unprecedented stimulus from governments worldwide helped crude prices recover part of the losses.

Gold futures have declined slightly, but are set to conclude the best year in a decade, as investors have looked for safe havens amid the COVID crisis. The metal is down 0.04% to $1,892.

In FX, the US dollar cannot find its bottom as the American currency is trading at the lowest level since April 2018. The USD Index fell 0.07% to 89.582. Still, EUR/USD is down 0.02% to 1.2292.

The British pound has gained about 0.10% against both majors after the UK approved AstraZeneca's vaccine. Also, the British parliament approved Prime Minister Boris Johnson's Brexit trade deal with the EU. Both sides want to start a new chapter in their relationship.


Stay on top of the markets with Swissquote’s News & Analysis


This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.

Feed news

Latest Forex Analysis


Latest Forex Analysis

Editors’ Picks

EUR/USD recovers within range, lacks follow-through

Encouraging macroeconomic data from the EU and the US boosted risked sentiment, which in turn, helped EUR/USD to advance, currently nearing the weekly high at 1.2075.

EUR/USD News

GBP/USD trades around 1.39 after a choppy reaction to the BOE

GBP/USD is trading around 1.39 after an 80-pip move around the BOE's "Super Thursday." The bank announced a slowdown in buying bonds but no change to the overall scope. US jobless claims and elections in Scotland are awaited. 

GBP/USD News

Gold Price Analysis: Gold bears seeking a correction to test bullish commitments

Gold has broken above the $1,800 mark, hitting the highest levels since February. The Confluence Detector is showing that XAU/USD has very few barriers through $1,850. Bears are lurking at resistance structure, eyeing a correction ahead of NFPs.

Gold News

Dogecoin price targets $1 as the chase for high-yielding cryptos accelerates

Dogecoin price strength combined with the complementary volume highlights the continued fascination in the digital token, portending further gains in the days ahead.

More Dogecoin News

US Nonfarm Payrolls April Preview: When the economy booms, its all about rates

The US labor market’s stars appear aligned for April.The economy is expanding rapidly, employers are confident and consumers eager to throw off the restraints of the past year.

Read more

Majors

Cryptocurrencies

Signatures