- S&P 500 up 15.5% YTD, 66.80% from March low.
- BTC heading toward $29,000
- Dollar 1% away from 6-year low
- Gold on verge of upside breakout
Key Events
Markets are ending a chaotic year calmly, with thin trading on Thursday as they hover near all-time highs. US futures for the Dow, S&P 500, NASDAQ and Russell 2000 have been wavering this morning, with most currently a trading marginally lower.
The dollar is at its lowest point in 32 months, just 1% away from a 6-year low. And Bitcoin continues making new records.
Global Financial Affairs
It was a year in which investors enjoyed extraordinary profits, especially if they bought the dip}} that began in mid-March, which was followed rapidly by some of the most powerful rallies in market history. As of yesterday's close on the penultimate day of 2020 trade, the S&P 500 was up 66.80% from its March low, posting a year-to-date gain of 15.5%.
But as trade winds down ahead of the New Year holiday, global markets are subdued.
Along with slumping futures, this morning the Stoxx Europe 600 Index headed lower, as all industries were in the red. With Germany already closed for the New Year's Eve holiday there, trading was so thin on the continent that volume on the Euro Stoxx 50 was nearly 80% below its 30-day average.
In Asia, Japan, Hong Kong, and South Korea were also closed. China’s Shanghai Composite, just about the only 'game in town' on Thursday was up 1.7%. The CSI 300 Index closed at a five-year high. Expanding factory production compounded news that locally sourced coronavirus vaccines from Sinopharm (HK:1099) will become available to the Chinese public. The offshore yuan climbed to its highest level since June 2018.
Australia’s ASX 200 tumbled, (-1.4%), on news that the government will impose harsher virus-related restrictions.
On Wednesday, during the New York session, stocks climbed with automakers in the lead. Small caps outperformed, pushing higher by 1%, the most for the Russell 2000 Index in nearly two weeks.
Yields, including for the 10-year Treasury note, edged lower.
The dollar rebounded from session lows, but was still down for the third day in a row, the lowest level for the greenback since April 2018. Another drop of just 1% would take it to the December 2014 low.
The USD is on track to continue its descent within its falling channel, after having completed back-to-back continuation patterns.
Equity profit-taking, compounded by a slipping dollar boosted gold.
The yellow metal has been struggling to break free of its falling channel.
Bitcoin's record breaking streak continues. The cryptocurrency has now ascended to the brink of $29,000, ony two weeks after breaking above the $20K milestone.
The digital currency edged higher this morning, after yesterday closing at the very top of the session, forming a solid, long, green candle. Volume, however, was low.
Oil edged lower.
WTI has been trading along its pennant, a continuation pattern, and is therefore expected to provide an upside breakout.
Up Ahead
- US {{ecl-294||Initial Jobless Claims figures print on Thursday.
- Most global stock markets are closed Friday for the New Year holiday.
Market Moves
Stocks
- Futures on the {{o|S&P 500 Index}} dipped 0.1%.
- The Stoxx Europe 600 Index fell 0.3%.
- The MSCI Asia Pacific Index gained 0.2%.
- The MSCI Emerging Markets Index climbed 0.4%.
Currencies
- The Dollar Index fell 0.1% to 89.63.
- The euro was little changed at $1.2295.
- The British pound climbed 0.3% to $1.3659.
- The Japanese yen was little changed at 103.15 per dollar.
Bonds
- The yield on 10-year Treasuries rose less than one basis point to 0.92%.
- The yield on 2-year Treasuries was unchanged at 0.12%.
- Germany’s 10-year yield rose less than one basis point to -0.57%.
- Britain’s 10-year yield decreased one basis point to 0.209%.
Commodities
- West Texas Intermediate crude declined 0.3% to $48.18 a barrel.
- Gold strengthened 0.3% to $1,899.05 an ounce.