The Friday Market Minute
- Global stocks mixed as traders look to improving economic sentiment while eyeing stimulus talks in Washington and Brexit negotiations in Europe.
- U.S. lawmakers close in on a $900 billion coronavirus aid package, but may miss a Friday deadline that could shutdown the federal government.
- Brexit talks enter ‘final hours’ with London and Brussels hopeful, but not certain, of reaching a deal on post-exit trade.
- Oil heads for its seventh week of gains, while copper price top $8,000 for the first time in seven years, as commodity markets point to a 2021 global recovery.
- Tesla shares in focus as it prepares to enter the S&P 500 Monday with a market value of more than $620 billion.
- U.S. equity futures point to a modestly softer open on Wall Street heading into the final full Friday trading day of the year.
U.S. equity futures edged lower Friday, taking Wall Street into the final full week of the year on a cautious note as stimulus talks in Washington look set to spill-over into the weekend.
Lawmakers are closing in a $900 billion coronavirus relief package, the need for which was underscored this week by a surprise jump jobless claims and a negative reading for November retail sales. The deal, however, won’t likely make it to a floor vote today as Republicans and Democrats haggle over various aspects of the spending package amid a looming federal government shutdown.
A similarly upbeat, yet potentially cautious tone was applied to Brexit talks between London and Brussels, which could either reach a final conclusion over the weekend or send Britain out of the European Union, after nearly 50 years, without a bespoke trade deal on December 31.
With uncertainty surrounding the two major headline risks to the trading session, traders were understandably reluctant to extend gains from last night’s record close on Wall Street into the overnight session, even as signals of a broader global recovery continue to emerge.
A key reading of business sentiment from Germany, Europe’s biggest economy, surprised to the upside, while copper prices, a key benchmark for industrial growth, passed the $8,000 per ton level for the first time in seven years.
Video: Economist breaks down the unexpected rise in unemployment claims, November housing data (CNBC)
Support for Moderna’s coronavirus vaccine from a panel of expert advisors to the Food & Drug Administration, which is likely to issue a final approval today, is also a potentially positive development for stocks over the near term
Futures contracts tied to the Dow Jones Industrial Average suggest a 25 point pullback from last night’s record close of 30,303.37 points, while those tied to the S&P 500 are priced for a modest 1.2 point decline.
Contracts tied to the Nasdaq, which is up 46% for the year and heading for its best week since early November, are indicating a 15 point decline.
Tesla shares will likely be in focus Friday as the clean-energy carmaker prepares for its entry into the S&P 500 Monday, with expectations of final-hour buying from index tracking funds and investors looking to benefit from its inclusion into the benchmark.
FedEx Corp. shares were also active, falling 3.2% to $283.00 each, after the world’s biggest package delivery group tagged a cautious outlook onto its stronger-than-expected second quarter earnings report.
Away from equities, the U.S. dollar index held at a two-and-a-half year low of 89.98 against a basket of six global currency peers, while benchmark 10-year Treasury note yields ticked higher to trade at 0.94%.
Oil prices edged lower, but remain on pace for their seventh consecutive weekly gain, as bets on a return to full demand next year continue to support crude markets.
WTI futures for January delivery were marked 2 cents lower at $48.34 per barrel, while Brent contracts for February slipped 18 cents to $51.32 per barrel.
In overnight trading, European stocks edged higher, supported by a stronger-than-expected Ifo reading of business morale from Germany and the hope of a late-hour Brexit trade deal, with the Stoxx 600 holding at a 10-month high of 397.62 points.
In Asia, the Bank of Japan’s decision to extend its policy of negative interest rates, as well as bond and stock purchases, kept the Nikkei 225 in the green, while reports of an expanded blacklist of Chinese companies by the White House pushed the region-wide MSCI ex-Japan benchmark 0.5% lower heading into the final hours of trading.
This article was originally published by TheStreet.