S&P 500 drops 2%, ends off low

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 %