S&P 500 drops 2%, ends off low
Source: GKFX / MT4 (December 22, 2020)
UK100 has failed an attempted breakout above its June high after gapping lower on Monday. A resumption of the uptrend above 6,600 is still possible but has been made less probable by the move above and then quickly below previous resistance from the June high.
TAKEAWAYS
• S&P 500, global stocks slump but end off lows
• Tesla stock dives 6% on first day in the S&P 500
• US Congress finally agrees $900 billion stimulus package
• Bank stocks jump after Fed allows share buybacks to resume
• GBP/USD slides 300pips before rebound
• DAY AHEAD: UK final Q3 GDP, US final Q3 GDP data
GURU WISDOM
"Returns matter a lot. It's our capital." — Abigail Johnson
MARKETS
*Daily closing price
↗ EUR/USD 1.2239 (+0.22%)
↗ GBP/USD 1.3464 (+0.47%)
↘ USD/JPY 104.34 (-0.16%)
↘ S&P 500 3694.92 (-0.39%)
↘ Hang Seng 26,306.68 (-0.72%)
↘ Gold 1814.81 (-0.33%)
↘ Oil (Brent) 50.86 (-1.40%)
↘ Bitcoin 23,113 (-1.34%)
NEWS
Wild stocks
The S&P 500 and other major indices saw heavy losses before rebounding strongly off lows of the day amid news of a new virus strain and subsequent claims from health officials and company executives that it is unlikely to affect vaccine and other approved drug effectiveness. Still concerns about the new strain prompted travel restrictions against the UK and diluted any optimism found from the passing of a new US stimulus package. Banks were among the top gainers thanks to news from the Fed that share buybacks would be allowed once again, a move that is known to boost share prices as well as artificially boosts earnings per share (EPS).New stimulus
The approval of a new US stimulus deal also evoked some volatility with a smaller and later package than had been hoped. Senate Majority Leader Mitch McConnell and Minority Leader Chuck Schumer announced the deal for which no detail is available yet. It is expected to be voted on tomorrow. The deal reportedly includes $600 checks for eligible Americans, which could arrive as soon as next week according to Treasury secretary Mnuchin.
GBP/USD
If Brexit weren’t enough, the British pound saw heavy early losses thanks to concern about the new virus strain in the UK. GBP/USD slumped 300 pips from high to low, falling back under 1.32 before regaining composure and pushing back up towards 1.35.
DAY AHEAD
*Times in GMT
00:30 AUD Retail Sales s.a. (MoM)(Nov) PREL 1.4 %
07:00 GBP Gross Domestic Product (QoQ)(Q3) 15.5 % 15.5 %
13:30 USD Gross Domestic Product Annualized(Q3) 33.1 % 33.1 %
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