Friday 11th December 2020
More worry than confidence
Dow holds just over the 30,000 mark
The economic stimulus package is stalling, Corona is exploding and the no-deal Brexit is becoming increasingly likely: none of these are reasons for investors to take action. However, the courses on Wall Street are trading at a high level. And then there are the spectacular individual values.
Caution has returned to Wall Street at the end of the trading week. The Dow Jones index managed to go into the weekend with a slight plus. The prospect of vaccinations against Covid-19 in the USA soon, and thus presumably an economic upturn, hardly lifted the mood. A panel of the US FDA has voted in favor of approval of the vaccine from Biontech and Pfizer. The vote is hardly surprising because the UK has recently started administering the vaccine. The corona pandemic, with still high numbers of new infections and tightened containment measures, continued to weigh on sentiment.
The Dow Jones Index ended up 0.2 percent firmer at 30,047 points, the broader one S&P 500 yielded 0.1 percent. For the tech-savvy Nasdaq composite it went down 0.2 percent.
Market participants on the other side of the Atlantic also rated the looming threat of a hard Brexit as a negative factor. "We have long thought that these negative political comments were negotiating tactics and that it was important for both sides to forge an agreement," said market strategist Seema Shah of Principal Global Advisors. But now there were growing concerns that the hurdles between the EU and Great Britain were insurmountable. Traders emphasized that a trade deal was priced in. If things turn out differently, there is a need for correction.
In the end, the slowing down was that the long-awaited economic stimulus program in the USA is not making headway. There is a new damper in the negotiations here. Republican Senate MPs do not want to support the bipartisan compromise in its entirety. After all, by extending the current federal budget, the US Congress has averted an impending budget freeze and thus a shutdown of federal agencies – if only for one week. A positive sign came from the business side. The mood of US consumers brightened more than expected in December.
Abcellera with 195 percent mark-up for debut
The individual values stood Walt Disney in focus. The entertainment group wants to expand its streaming service considerably and thereby massively increase the number of subscribers in the coming years. The course then shot up by 13.6 percent. The Swiss insurance group Zurich takes over the property and casualty insurance business from Metlife in the US for $ 3.94 billion. The seller's share fell 0.8 percent.
Oracle increased sales and profits in its second fiscal quarter thanks to a strong cloud business and performed better than expected. The outlook for the current third quarter of the database specialist was also above the analyst estimates. The share gained 1.9 percent.
The Broadcom stocks fell one percent. The software and semiconductor group exceeded expectations with its results and outlook. However, the share has already made up 30 percent in the current year, which encouraged profit-taking. At the same time, Broadcom announced that Kirsten Spears will be the new CFO.
With the prominent support of film star Uma Thurman, the pharmaceutical startup went Abcellera on the US stock exchange. The demand is said to have been huge. The issue price of $ 20 was above the last-mentioned and previously raised range of $ 17 to $ 18. The stock closed at $ 58.90, an increase of 195 percent over the issue price.
At the Foreign exchange market the dollar index rose slightly by 0.2 percent with the increased risk aversion. The British pound, on the other hand, was under pressure with growing concerns about a hard Brexit – against the dollar and the euro. British Prime Minister Boris Johnson said there was a "very high probability" that negotiations with the EU would fail. The gold price was only slightly affected by the ongoing uncertainties in the market. The troy ounce rose minimally by 0.1 percent to $ 1,839.
Oil prices trended lower on concerns about demand. In addition, the service provider Baker Hughes reported an increasing number of active wells in the USA. The price for a barrel of US light oil of the grade WTI was down 0.4 percent to $ 46.61, North Sea oil of the variety Brent fell 0.5 percent to $ 50.01. Brent was barely above the $ 50 mark that the price had taken the previous day for the first time since March.
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