U.S. Stock Futures Gain After Trump Signs Stimulus Deals
We’ve got another week ahead and another short week at that for the stock market. I hope everyone has enjoyed their Christmas holiday weekend. The U.S. stock market futures climbed on Sunday evening. This came after President Trump backed down from his threats and signed a nearly $900 billion coronavirus aid bill that will avert a government shutdown.
With the signing of the bill, many would be breathing a sigh of relief. After all, there were fears of delays in a stimulus package. The move could drive more optimism that has been supporting the markets. The House of Representatives will vote today on a bill to authorize the second stimulus check Trump is asking for, for up to $2,000 per qualified adult. The stimulus “could be supportive of the market, supportive of the U.S. economy,” said Suresh Tantia, strategist at Credit Suisse Group AG. “Next year all the building blocks are there for markets to continue this rally.”
The major future indexes are all trading in the positive territory. The Dow, S&P 500, and Nasdaq 100 futures were all in positive territory, moving 0.64%, 0.48%, and 0.60% higher respectively as of 5.04 a.m. ET. Stocks ended a holiday-shortened trading week Thursday up slightly. The Dow rose 0.2%, to 30,199.87, leaving it up 0.1% for the week. The S&P 500 edged up to 3,703.06, an increase of less than 0.1%, but finished down 0.2% for the week. The Nasdaq Composite rose 0.3%, to 12,804.73, contributing to a 0.4% weekly rise.
Bitcoin Price Breached $28,000 For The First Time
It’s been a tough year by all accounts. But the same thing could not be said for Bitcoin. The virtual asset saw its value shoot pass $28,000, hours after crossing the $27,000 mark. Perhaps you are wondering, what exactly is happening with this cryptocurrency? You see, the meteoric rise is not without reasons. With the Fed keeping interest rates at dovish levels amid severely weakening dollars, investors are looking for ways to hedge against the weakening dollar. And bitcoin appears to be an attractive choice these days. Also, the participation of institutional investors is also perceived to be the driving force behind such massive rallies.
The tremendous rise in bitcoin might make it easy to believe we’re going to see $30,000 before 2021. However, it’s good to keep in mind that this surge is taking place over a weekend holiday on this volume. It could be a completely different picture on Monday. Not to mention that the virtual asset could see more regulatory scrutiny and tighter regulation with Biden in the White House.
“Without knowing how authorities will seek to more robustly regulate crypto in the coming years, it is hard for the markets to continue growing at the same rate they are now, especially if, as some fear, regulations aimed at curbing innovation rather than fostering it are enacted … Once again, clarity is the name of the game.”– Guy Hirsch, Managing Director of eToro
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Not long ago, Pfizer (PFE Stock Report) mentioned that its coronavirus vaccine is effective against the new coronavirus variant in the U.K. And on Sunday, AstraZeneca (AZN Stock Report) also stated that its vaccine will be effective against the new variant of the virus that is currently driving a rapid surge in infections in Britain. The British government has reportedly set a goal of vaccinating two million people within two weeks of distribution, starting on January 4.
“We think we have figured out the winning formula and how to get efficacy that, after two doses, is up there with everybody else … I can’t tell you more because we will publish at some point.” – Pascal Soriot, chief executive of AstraZeneca
It isn’t clear at this point whether AstraZeneca’s vaccine will have a high efficacy like Pfizer or Moderna’s (MRNA Stock Report). But there are reasons to celebrate as it does feel like we are one step closer to curbing the virus. With that, we can pay more attention to the economic recovery as the pandemic subsides.
Alibaba Antitrust Fears Worsen Stock Sell-Off
Shares of Alibaba (BABA Stock Report) were in the spotlight once again on Monday. The internet giant raised a proposed stock repurchase program to $10 billion. That aims to offer more support to shares battered by a widening antitrust investigation. Alibaba stocks slide on the Hong Kong stock exchange, suggesting the raised buyback failed to calm investors’ nerves. For years, Alibaba enjoyed a meteoric rise in the domestic and global markets. In fact, Alibaba is beating Amazon (AMZN Stock Report) in several key metrics. These include gross profits, revenue growth, and operating income.
Some attribute these metrics to the advantages that Alibaba has enjoyed. These may include economies of scale, network effects, and perhaps government support as well. The latter may be important in any country, but especially so in China. Government opposition can break industry giants as quickly as it made them. That’s what appears to be the case with Alibaba lately. One prime example of this is how back in November, Chinese regulators put a stopper on Alibaba’s plans for the initial public offering of its fintech affiliate Ant Group.
Gold Prices Rise After Stimulus Deal
Gold prices rose as much as 0.7% to $1,896.70 an ounce and traded at $1,894.02 at 11.25 p.m. ET. That would be the highest close since Nov. 6. The surge in gold price came after President Trump signed the $900 billion package deals. Gold is set to post the first monthly gain since July after a run of losses prompted by the development of effective coronavirus vaccines. Further supporting the yellow metal on Monday, the dollar edged lower against a basket of currencies, bolstering gold’s appeal to other currency holders. Apart from the weakening of the U.S. dollar, the unprecedented fiscal and monetary stimulus are also the reasons for gold’s rally this year.