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The Wednesday Market Minute

  • Global stocks extend gains, closing in on record highs, as U.K. lawmakers approve a third coronavirus vaccine amid the spread of a new variant of COVID 19.
  • AstraZeneca and Oxford University’s vaccine was given the nod by U.K. health authorities, with the government ordering 100 million doses of the low-cost treatment.
  • Senate Leader Mitch McConnell blocks the passage of a bill that would have boosted direct COIVD relief payments from $600 to $2,000, virtually killing its prospects while triggering the wroth of the President.
  • European stocks hit fresh 10-month high as Brexit agreement looks set for passage in Parliament ahead of tomorrow’s year-end deadline.
  • U.S. equity futures suggest a firmer open on Wall Street, following all-time intra-day highs on Tuesday.

U.S. equity futures traded higher for a third consecutive session Wednesday, while the dollar continued its late-year retreat, as investors looked to the U.K. approval of a new coronavirus vaccine over delays in the Senate to increasing COIVD relief payments.

Senate leader Mitch McConnell defied demands from President Donald Trump to follow House lawmakers and boost the amount of direct payments to Americans in the $892 million COVID relief bill from $600 to $2,000, attaching it instead to a broader legislation that would both repeal liability protections for social media companies while setting up a commission to study electoral fraud.

The moves likely kill any changes of increased payments under the current Congress, which expires this weekend, and sets the tone for partisan clashes in President Elect Joe Biden’s incoming administration, which begins governing in less than three weeks’ time.

Stocks were given an overnight boost, however, by news that Britain’s Medicines and Healthcare products Regulatory Agency had approved the coronavirus vaccine developed by AstraZeneca Plc  (AZN) – Get Report and Oxford University, with the government ordering 100 million doses, as countries scramble to contain a new variant of the virus that is accelerating infections around the world.

Futures contracts tied to the Dow Jones Industrial Average, which touched an all-time intra-day peak of 30,588.56 yesterday, are priced for a 117 point opening bell gain. 

Contracts linked to the S&P 500, which is up 15.36% for the year, are set for a 16 point bump while those linked to the Nasdaq are indicating a 55 point advance for the tech-focused benchmark, which as gained more than 47% since the start of the year.

Despite the stimulus delay triggered by McConnell’s moves in the Senate last night, the U.S. dollar extended its decline against its global currency peers in overnight trading, as the dollar index fell 0.32% to 89.709, pegging its year-to-date decline at around 7.4%.

European stocks got a lift from the AstraZeneca vaccine approval, as well as the likely passage of legislation today in the U.K. parliament that will cement the Brexit trade deal reached between London and Brussels last week.

The Stoxx 600 index, the region’s broadest measure of share prices, rose 0.18% to a 10-month high, while Britain’s FTSE 100 added 0.2% in holiday-thinned trading.

Oil prices extended gains, as well, with U.S. crude inching towards $50 a barrel after the American Petroleum Institute said domestic stockpiles fell by 4.8 million barrels last week amid improving demand prospects. 

WTI futures contracts for February delivery rose 36 cents to $48.36 per barrel while Brent contracts for the same month jumped 33 cents to $51.42 per barrel.

Overnight in Asia, the improving risk sentiment lifted the region-wide MSCI ex-Japan benchmark 1.42% to a fresh record high of 659.09 points while the Nikkei 225 in Tokyo closed 0.45% lower in the session at 27,444.17 points.