Monday's Market Recap - Agreement On Fiscal Stimulus Dampened By New Covid-19 Strain In The UK.
- Dec 21, 2020
- 3 min read
What is The Premarket Telling Us?
8:00 AM.
At this hour US stock futures are flashing bright red, with Dow futures down 441 points, Nasdaq futures down134 points, and S&P futures down 63 points. Overnight, Asian markets also gave up ground as the new strain of coronavirus is discovered in the UK.
On The Bond Desk:
The US 10 Year Bond Yield at 0.96%, up 0.03%.
Currency Desk:
Eurodollar: 1.22
UK Pound: 1.35
Crude Oil:
WTI crude oil futures $47.36/barrel, down 3.82%.
On the Earnings Calendar:
None.
In M&A News:
None.
What About The Asian And European Markets?
Major Asian markets closed the day mixed. Japan (Nikkei 225) down 0.18%, Shanghai up 0.76%, Hong Kong (Hang Seng) down 0.72%.
Major European markets ended solidly lower as a new strain of the coronavirus strain in the UK raises hovoc, in than country. German (DAX) fell 1.73%, France CAC 40 fell 2.43%, London FTSE 100 down 1.73%.
Market And Sector Dynamics
With Congress reaching an agreement on the elusive fiscal stimulus on Sunday one would expect investors would be chomping at the bit to push markets higher at the open. That is not the case this morning, as investors chose to focus on the new more contagious strain for Covid-19 virus taking hold in the UK leading to another shutdown there. At the open this morning, the Dow fell 296 points, Nasdaq fell 125 points, and the S&P fell 41 points. WTI crude oil also fell to $47.02/barrel, down4.24%, and the US 10 Year Bond held at 0.931%.
Vaccine optimism is also in the news today as the Moderna Covid-19 vaccine, which started being shipped on Sunday, is being injected into arms across the country today.
Financials, and big banks such as JPMorgan, and Goldman Sachs were favored by investors today, after a recent stress test, performed by the Federal Reserve Bank, has given some banks the OK to start buying back their own shares. JPMorgan has indicated that it intends to reinstate its stock buyback program shortly.
One hour after the opening bell the Dow fell to the low of the day, down 362 points. The market gradually improved from that point, reaching the flat line around 1:00 PM, and moving even higher from there. At the high of the day shortly after 2:30 PM, the Dow was up near 120 points. Stocks did pull back from the highs into the close, but managed to hold on to about half of the earlier gains.
Nine of the eleven S&P sectors closed today's session with losses, led by Energy, Utilities, Consumer Staples, Healthcare, Real Estate, Consumer Discretionary, Communication Services, Industrials, and Basic Materials. Financials and Technology ended with gains.
Factors Influencing Today's Market
A new, more contagious strain of the coronavirus has developed in the UK stoking investor fear across the globe.
Vaccinations have begun using the Moderna Covid-19 vaccine which was approved by the FDA on Friday.
The Federal Reserve in its latest stress test is allowing some banks to reinstate stock buybacks.
The US 10 Year Bond Yield closed at 0.935%, down 0.35%.
WTI crude oil price closed at $47.80/barrel, down 1.61%.
Market Close Volume Traded And Advance Decline Ratio
Markets ended today's session mixed. After being down for most of the session the Dow ended with a gain of 37.40 points, Nasdaq fell 13.12 points, and the S&P lost 14.49 points. Total NYSE volume traded, a moderate 4.80 billion shares. Declining shares outpaced Advancing shares nearly 2:1.
Data Sources: Bloomberg, CNBC, CNN Money, Google Finance, Market Watch, TD Ameritrade, Yahoo Finance. Wall Street Journal - Market Diary.
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