- US stock markets have been under selling pressure, with the S&P 500 dropping further back from the 3800 on Friday.
- Markets are in a broadly risk-off mood on the final trading day of the week.
- US equity markets seem to have seen a “sell the fact” reaction to President-elect Biden’s stimulus plan.
US stock markets have been under selling pressure, with the S&P 500 dropping further back from the 3800 on Friday after it closed below the psychological level on Thursday. The S&P 500 currently trades just under 0.5% lower on the day in the 3770s but has recovered sharply from lows in the 3750s and still trading within 1.5% of the all-time intra-day highs set at the end of last week.
Markets are in a broadly risk-off mood on the final trading day of the week; European equity markets just closed with significantly steeper losses than are currently being seen in the US, with the Stoxx 600 dropping 1.0%. News that distribution of the Pfizer vaccine on the continent will temporarily slow as the company upgrades its European production facilities is being cited as one factor that weighed on sentiment.
Moreover, lockdown concerns are also there, with Italy set to toughen lockdown restrictions and Germany look likely to follow suit and various Eurozone member countries face idiosyncratic political uncertainty (the Italian government crisis continues and the Netherlands Government just resigned over a child-subsidy scandal).
All of these factors are likely to be contributing to the downbeat tone being seen in equity markets across the pond, all though US traders seem much more focused on domestic themes.
US equity markets seem to have seen a “sell the fact” reaction to the announcement of US President-elect Joe Biden’s stimulus plan announcement (he announced a $1.9T “rescue” package including a $1400 top up stimulus cheque for each American, as expected). Biden’s “hawkish” tone on taxes (Biden impressed the need for all Americans to pay their fair share) is also being cited as weighing on sentiment.
Meanwhile, questions linger over whether or not Biden will actually be able to get his plan through Congress. He would need 60 Senate votes to get the bill through as it is, which almost certainly won’t get because that would mean needing 10 Republican defectors, meaning the final price tag on stimulus might be substantially lower.
Elsewhere, the outgoing Trump administrations seems intent to leave as many landmines as it can for the incoming Biden administration with regarding to US/China relations; the Pentagon just blacklisted another nine companies (including Xioami) to its list of firms it considers associated with the Chinese military and are thus banned from US investment.
Additionally, US retail sales numbers for December were bad, with declines seen in headline, core and control group sales. This comes off the back of poor weekly jobless claims numbers for the week ending 9 January that was released yesterday, showing a steep rise in initial claims.
Pre-market earnings from three major US banks (JP Morgan, Wells Fargo and Citi) were in focus pre-market; JP Morgan (-1.9%) trades lower despite a strong earnings report, perhaps amid comments that it does not expect loan demand to rebound significantly in 2021. Citigroup (-6.3%) also trades in the read despite beating expectations in terms of EPS, perhaps due to disappointing revenue figures and a lower-than-expected share buy-back programme. Wells Fargo (-6.8%) also trades lower, after also posting disappointing revenue and signalling a lower-than-expected share buy-back programme. Earnings do not seem to have given broader equity markets much impetus to trade off of.
|Today last price||3773.75|
|Today Daily Change||-41.00|
|Today Daily Change %||-1.07|
|Today daily open||3814.75|
|Previous Daily High||3823.25|
|Previous Daily Low||3810.75|
|Previous Weekly High||3823.5|
|Previous Weekly Low||3660|
|Previous Monthly High||3755.75|
|Previous Monthly Low||3604.5|
|Daily Fibonacci 38.2%||3815.52|
|Daily Fibonacci 61.8%||3818.48|
|Daily Pivot Point S1||3809.25|
|Daily Pivot Point S2||3803.75|
|Daily Pivot Point S3||3796.75|
|Daily Pivot Point R1||3821.75|
|Daily Pivot Point R2||3828.75|
|Daily Pivot Point R3||3834.25|
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