Tuesday 22nd December 2020
Stimulus package too late?
Corona worries weigh on Wall Street
In US stock exchange trading, traders cannot find reasons to buy. Economic data disappoint. And the second aid package for the economy will probably not be enough either. The country is preparing for a harsh winter.
Wall Street has again shown a mixed trend. Concerns about the new highly contagious coronavirus variant in Great Britain and the travel restrictions imposed against this background with the United Kingdom put pressure on sentiment. In addition, there were concerns about possible negative effects on the economy. The US economic stimulus program, which was passed after a tough struggle, limited the downside potential, it said. Then there was disappointing data on sentiment among US consumers.
The Dow Jones Index lost 0.7 percent to 30,016 points. The S&P 500 decreased by 0.2 percent to 3687 meters. The Nasdaq composite on the other hand increased by 0.5 percent to 12,808 jobs. This was supported by the plus of Apple shares. However, the technology stocks had recently shown themselves to be winners in the pandemic.
"On the eve of 2021, the economy has little momentum as a catastrophic third wave of Covid is restricting mobility, cutting employment and reducing demand," said Greg Daco, chief US economist at Oxford Economics. "The $ 900 billion stimulus package comes months late and will probably not be enough to prevent a harsh winter, but it's better than nothing," added the economist.
Added to this was the uncertainty surrounding the discovery of the virus mutation in the UK and the threat it posed, particularly the effectiveness of the vaccines. The vaccine developer Biontech himself has expressed confidence that his product should also work against the mutation. Otherwise, an effective vaccine variant can be developed relatively quickly.
Sentiment among US consumers unexpectedly weakened significantly in December, with economists expecting an increase. In addition, the previous month's value was revised downwards. The GDP data for the third quarter did not provide any impetus, but it was also the third reading. Accordingly, the US economy grew by 33.4 percent annualized in the months July to September.
Apple searched further
On the corporate side was the Apple stock still in focus. The share climbed another 2.8 percent. The group apparently wants to bring a self-driving car onto the market in 2024. According to a report, Apple is aiming for a breakthrough in battery technology. This had already propelled Apple shares in late trading on Monday.
The Walmart papers lost 1.2 percent. The US administration of President Donald Trump has sued the company. She accuses the retail giant of fueling the opioid crisis in the US by inadequately checking prescriptions for possible inconsistencies or concerns despite repeated warnings from its own pharmacists. The shares of Peloton Interactive rose 11.6 percent after the fitness equipment maker announced the acquisition of Precor. Peloton pays $ 420 million for the competitor.
There was little interest in the "safe havens". The yield was evident on the bond market ten-year papers 1.7 basis points lower at 0.92 percent. The economic stimulus program that has now been adopted should help the USA through a difficult winter, according to analysts.
The price of the troy ounce gold fell 0.9 percent to $ 1,860, largely due to dollar strength. "Global stock markets stabilized on Tuesday after suffering from the new corona developments on Monday. This held back gold buyers," said Jim Wyckoff, senior analyst at Kitco.com.
On the foreign exchange market, the dollar sharply, the dollar index rose 0.7 percent. The euro, on the other hand, came under pressure, trading at $ 1.2157 in late US trading, after a daily high of $ 1.2257. The Euro ING is holding up "very well" despite the stronger US dollar, the strict renewed restrictions in the wake of the corona pandemic and the border closings in Europe. "It is too early to announce a possible correction towards 1.2015 dollars, but new highs are not expected in the short term either," said foreign exchange analyst Chris Turner.
Fears of a delayed economic recovery and consequent lower demand, combined with the stronger dollar, weighed on oil prices. The price for a barrel of the US grade WTI decreased 2.1 percent to $ 46.94. The price for Brent decreased 1.7 percent to $ 50.02.
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