Welcome to the last trading week of 2020, a year when we can’t see the back of soon enough. Shares point higher after President Donald Trump signed that $ 900 billion stimulus bill, despite 11th hour demands for larger emergency checks.
With just a handful of trading days before the year ends, our call of the day says investors should brace for a bumpy start to 2021 if we close the year with stock market records.
It has been a “unparalleled year for financial assets,” with stock markets collapsing earlier this year in the wake of the COVID-19 pandemic, followed by an impressive rise as authorities released the stimulus, notes John Hardy, FX strategy chief at Saxo Bank. .
“Market historians looking back on another fantastic year – 1999 – when the S&P 500 closed the year on a new record high will remember that the early days of 2000 saw a vicious correction. Yes, times were different and the focus then was on Y2K and the concentrated bubble of the time, but investors should be reminded that even during major bull market runs you can see significant setbacks, “Hardy said in a note to clients published Monday.
Fresh closing highs hardly seem like a far-fetched idea for Monday’s session. On Thursday, the S&P 500 closed just 0.5% of the record of 3722.48 on December 17. Stock futures indicate that the S&P may not be too far from that level.
Others have discussed ominous parallels between this market and 1999. The S&P 500 ended 19% that year, but fell 10% in 2000. That’s because market bears are hard to find today, with a median price target at the end of the year for the S&P 500 of 4,027.21 among the major forecasters from Wall Street.
The markets
Stock Futures YM00,
ES00,
NQ00,
are higher. The London markets are closed for a longer public holiday, while the European markets SXXP,
have risen, also helped by last week’s post-Brexit trade deal, which gives GBPUSD,
a big boost. Asian markets mostly rose, and bitcoin BTCUSD,
hovering around $ 26,000, after its high of $ 28,000 over the Christmas weekend. But does it fit your portfolio?
The buzz
President Trump signed the stimulus bill, but also said Congress would vote to increase individual stimulus payments to what it wanted – $ 2,000 – of the agreed $ 600. House Speaker Nancy Pelosi said she would take another vote Monday, but the Republicans blocked such an attempt last week.
Alibaba BABA,
9988,
increased its share buyback program from $ 6 billion to $ 10 billion, but the e-commerce giant’s stock fell nearly 8% in Hong Kong, and was still suffering from an antitrust investigation by Chinese regulators. Over the weekend, authorities also demanded online financing platform Ant Group, of which Alibaba owns a 33% stake, to clean up its operations and present a plan to do so, after it suspended its stock market debut last month.
The EU vaccination campaign COVID-19 started last weekend. US officials are looking “very seriously” at a new strain of the virus in the UK, says the government’s top infectious disease expert, Dr. Anthony Fauci. He also warned of a possible “wave on a wave” after Christmas in the US.
According to the Mastercard Spending Pulse survey, US holiday spending increased 3% from Oct. 11 to Dec. 24. The biggest jump was seen in home furniture and furnishings, while spending on clothing declined.
The man believed to be responsible for the Christmas Day bombing in Nashville is said to have been killed in the explosion, investigators say.
The graph
With a ‘slightly larger’ and ‘earlier’ stimulus package approved, Goldman Sachs has raised its growth expectations for the US. A team led by chief economist Jan Hatzius now forecasts growth of 5% in the first quarter of 2021, from 3% earlier, and “significantly higher production levels in all four quarters”.
They expect a significant increase in disposable income in the first quarter:
Random reads
The UK government plans to use supermarket checkout counters to combat obesity
Spotted in the Indian Ocean, a previously hidden group of blue whales
Italy plans COVID-19 vaccinations in flower-filled pavilions to help cool down recipients
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