Dow Futures Turn Lower As Markets Eye FDA Coronavirus Vaccine Decision; Weekly Jobless Claims Rise to 853,000

Markets will navigate a plethora of headline risks Thursday as stocks peel away from record highs ahead of an ECB rate decision, weekly jobless claims and the FDA's meeting to approve the Pfizer/BioNTech coronavirus vaccine.
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The Thursday Market Minute

  • Global stocks mixed in a cautious overnight session heading into a plethora of Thursday headline risks, highlighted by the FDA's emergency use authorization hearing on the Pfizer/BioNTech vaccine.
  • The FDA has signaled its support for the EUA application, and will likely allow for the vaccine rollout by Saturday or Sunday.
  • The European Central Bank unveiled a new new package of support measures in the face of rising COVID infections, including expanded bond purchases and a new pledge to keep interest rates at near zero.
  • U.S. coronavirus deaths passed 3,200 yesterday, with new infections rising at more than 200,000 per day, as the pandemic accelerates into the holiday season.
  • Lawmakers in Washington pass a one-week extension for federal agency funding as they buy more time to negotiate a broader COVID relief package as job growth slows and stay-at-home orders intensify.
  • Facebook shares extend declines following last night's antitrust lawsuit lead by the New York Attorney General's office, a move CEO Mark Zuckerberg called an 'existential threat' to the social media giant.0
  • U.S. equity futures point to a flat open on Wall Street following weekly jobless claims data and the ECB's December rate decision.

U.S. equity futures edged modestly lower Thursday ahead of a busy session for headline risks, with investors eyeing a European Central Bank policy meeting, the Food & Drug Administration's approval of the Pfizer BioNTech vaccine, stimulus talks in Washington and weekly jobless claims.

Weekly jobless claims jumped to 853,000 for the period ending on December 5, well ahead of the 725,000 forecast, the biggest gain since early September. The four-week average, as well, ticked up to 776,000.

All of these market-moving events, meanwhile, are set against what can no longer be ignored: the dangerous and deadly pre-holiday coronavirus surge, which took the lives of 3,250 people yesterday while infecting nearly 220,000 in the most destructive day since the pandemic began in late February. 

The spread of the virus, and its human and economic devastation, formed the central plank of the ECB's policy meeting this morning in Frankfurt, with President Christine Lagarde outlining a €500 billion expansion of the Bank's €1.35 trillion pandemic bond buying programing, as well as well a pledge to keep interest rates at near zero until possibly the middle of the decade.

The framework is also likely to be employed by the Federal Reserve, which meets next week in Washington, now that large swathes of the U.S. economy are returning to lockdown and stay-at-home orders and job growth is slowing sharply in the final weeks of the year.

The weekly jobless claims increase will likely underscore that concern, and could spark a fresh move for face-to-face stimulus negotiations between House Speaker Nancy Pelosi and Senate Leader Mitch McConnell, who remain deadlocked in their positions on COVID relief despite agreeing to a one-week extension that will keep federal agencies funded until December 18.

U.S. equity futures were range-bound in overnight trading as a result of the plethora of headline risks, with contracts tied to the Dow Jones Industrial Average indicating a 115 point opening bell dip and those linked to the S&P 500 priced for an 18 point bump to the downside.

Contracts tied the Nasdaq Composite index, which snapped a four-day winning streak with last night's 243 point decline, is set to open 105 points lower.

Facebook's  (FB) - Get Report 2% slide last night was a big part of the Nasdaq sell-off, precipitated by the New York Attorney General's lawsuit, supported by nearly all other U.S. states, that seeks to address what it calls the group's social media 'monopoly'. Shares in the group are marked another 1% lower in pre-market trading, with CEO Mark Zuckerberg calling the suit an 'existential threat' to the company's future.

Other stocks to watch Thursday include AirBnb Inc.  (ABNB) - Get Report, which priced its IPO late last night at $68 per share, valuing the home rental platform at around $48 billion. The shares will begin trading on the NYSE later today, with the market looking to see if yesterday's extraordinary surge in DoorDash  (DASH) - Get Report shares, which rose nearly 80% on their debut to $182 per share, will be repeated.

Pfizer  (PFE) - Get Report shares will also be in focus as the FDA begins its Emergency Use Authorization (EUA) meeting to decide the fate of its coronavirus vaccine, made in conjunction with Germany's BioNTech  (BNTX) - Get Report and currently being rollout out in Britain. All signs suggest the FDA will grant the EUA application, however, and vaccinations are expected to begin before the start of next week.

Outside of the United States, stocks were mixed in a cautious overnight session, with modest declines in Asia followed by meagre advances in Europe ahead of the ECB meeting in Frankfurt and concerns over the lack of an agreement on Brexit trade following last night's meeting between Prime Minister Boris Johnson and European Commission President Ursula von der Leyen. 

The pair have, instead, set a Sunday deadline for a post-Brexit trade agreement, with two weeks remaining before Britain is scheduled to leave the bloc. 

The Stoxx 600 was marked 0.01% higher in early trading in Frankfurt, while of softer U.K. pound, as well as higher energy prices, helped the FTSE 100 to a 0.43% gain in London.