Welcome to the last week of negotiations in 2020, a year in which we cannot see what happened quickly enough. Stocks are pointing up after President Donald Trump signed that $ 900 billion stimulus bill, despite 11-hour demands for bigger relief checks.
With just a few trading days before the end of the year, our call of the day says investors need to prepare for a troubled start in 2021 if we close the year with records on the stock market.
It was an “unprecedented year for financial assets”, with stock markets melting earlier this year with the COVID-19 pandemic, followed by an impressive increase as authorities used the stimulus, notes John Hardy, head of foreign exchange strategy, from Saxo Bank.
“Market historians, looking at another incredible year – 1999 – in which the S&P 500 closed the year at a new historical record, will remember that the early days of the year 2000 saw a vicious correction. Yes, times were different and the focus then was on the Y2K and the concentrated bubble of the time, but investors need to remember that even during the big bull market races, you can see significant setbacks, ”said Hardy, in a note to customers who posted Monday.
The new closing highs hardly seem like a far-fetched idea for Monday’s session. On Thursday, the S&P 500 closed just 0.5% of its record 3722.48 close seen on December 17. Stock futures are indicating that S&P may not open very far from that level.
Others discussed sinister parallels between this market and 1999. The S&P 500 ended that year up 19%, but fell 10% in 2000. That’s because market prices are still hard to find today, with an end price target average year for the S&P 500 of 4,027.21 among major Wall Street analysts.
The markets
YM00 stock futures,
ES00,
NQ00,
are higher. London markets are closed for an extended bank holiday, while European markets SXXP,
are on the rise, helped also by last week’s post-Brexit trade deal, which is giving GBPUSD in pounds sterling,
a big boost. Asian markets have increased mainly, and bitcoin BTCUSD,
is hovering at $ 26,000, after breaking a record $ 28,000 over the Christmas weekend. But is it right for your portfolio?
The buzz
President Trump signed the stimulus bill, but also said that Congress would vote on raising individual stimulus payments for what he wanted – $ 2,000 – out of the agreed $ 600. House Speaker Nancy Pelosi said she would take another vote on Monday, but Republicans blocked such an effort last week.
Alibaba BABA,
9988,
increased its stock buyback program from $ 6 billion to $ 10 billion, but the e-commerce giant’s shares fell nearly 8% in Hong Kong, continuing to suffer from an antitrust investigation by Chinese regulators. Over the weekend, officials also demanded that the online finance platform Ant Group, of which Alibaba holds a 33% stake, clean up its business and come up with a plan for this after suspending its stock debut last month.
The EU’s COVID-19 vaccination campaign started over the weekend. US officials are “very seriously” looking at a new strain of the virus in the UK, says the government’s leading infectious disease expert, Dr. Anthony Fauci. He also warned of a possible “surge” after Christmas in the U.S.
U.S. holiday spending increased 3% from October 11 to December 24, according to the Mastercard Spending Pulse survey. The biggest jump was seen in furniture and home furniture, while spending on clothing fell.
The man believed to be responsible for the Nashville bombing on Christmas Day died in the explosion, investigators say.
The graph
With a “slightly larger” and “earlier” stimulus package now approved, Goldman Sachs has raised its growth forecasts in the US. A team led by chief economist Jan Hatzius now predicts growth of 5% in the first quarter of 2021, against 3% previously, and “significantly higher levels of production in all four quarters”.
They expect a big jump in first quarter available revenue:
Random readings
The UK government plans to use rows of supermarket checkouts to combat obesity
Spotted in the Indian Ocean, a previously hidden group of blue whales
Italy plans COVID-19 vaccinations in flowered pavilions to help recipients relax
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