The New Year's Eve Market Minute
- Global stocks close out 2020 at an all-time high as vaccine rollouts, central bank support and government spending pledges drive markets higher all around the world.
- Senate leader Mitch McConnell refuses to table a vote on House bill to boost stimulus checks to $2,000, effectively killing prospects under current Congress.
- California identifies new COVID variant, first detected in the United Kingdom, as U.S. coronavirus cases continue to rise by around 200,000 per day and deaths top 341,000.
- U.S. equity futures suggest a flat open on Wall Street after Weekly jobless claims fall to 787,000, with the S&P 500 holding on to a 15.52% gain for the year.
Wall Street looks set to close out an extraordinary year on a quiet note Thursday, with equity futures suggesting modest declines on the final trading day of 2020 amid thin volumes and closures for major markets around the world.
Weekly jobless claims, which fell 16,000 from the prior period to 787,000 for the week ending on December 26 will likely provide at least some pre-market volatility as traders say good-bye to one of the most difficult years on record. The Dow Jones Industrial Average plunge nearly 11,000 points between February 18 and March 23 as the coronavirus pandemic raged through the world's biggest economy, only to record a slew of all-time highs in the subsequent rally that lifted the benchmark past the 30,000 point barrier earlier this month.
What could have been a final boost for stocks heading into the New Year was, however, killed-off by Senate leader Mitch McConnel's refusal to table a vote on increasing COVID stimulus checks from $600 to $2,000, vowing that the upper chamber is "not going to be bullied into rushing out more borrowed money into the hands of Democrats' rich friends who don't need the help."
With a new Congress set to be sworn-in Sunday, and run-offs in Georgia that could flip control of the Senate to the Democrats, deeper stimulus from Washington is still on the table, but no major moves are expected until President Elect Joe Biden takes control of the White House on January 20.
In the meantime, Wall Street looks content to ride out 2020 with only modest changes to last night's closing levels, with futures contracts tied to the Dow indicating a 26 point decline and those linked to the S&P 500 priced for a 2.3 point bump to the downside.
European stocks were mixed, with most major markets closed for New Year's Eve, although a firmer pound pushed Britain's FTSE 100 -- which is filled with stocks that earn most of their revenues overseas -- to a 1.45% decline on the final trading day of the year. France's CAC-40 closed 0.9% lower to put its year-to-date decline at 7.1%.
The U.S. dollar index continued its slide against its major European peers, falling 0.1% on the session to a 2018 low of 89.604 in overnight dealing, with short positions against the greenback riding at a three-month high of more than $26.6 billion, according to CFTC data.
The weaker dollar kept the overnight pullback in oil prices in check, even as Energy Department data showed a larger-than-expected 6.1 million barrel decline in domestic crude stocks yesterday and China's official economic activity reading for December showed consistent expansion for the world's biggest energy importer.
WTI futures contracts for February delivery slipped 22 cents to $48.18 per barrel while Brent contracts for the same month fell 23 cents to $51.40 per barrel.
Overnight in Asia, China's CSI index closed at a five-year high following news that government health officials had approved a new coronavirus vaccine and PMI data held well above the 50 point mark that indicates economic expansion, helping the MSCI ex-Japan benchmark to a fresh all-time high of 664.19 points.
Japan's Nikkei 225, which is up 16% for the year, was closed for the traditional New Year's Eve celebrations.