Friday 18th December 2020
Profit taking and skepticism
Wall Street suspends record hunting
The US stock exchanges stick to the principle of hope. Nevertheless, investors do not want to go into the weekend with risk. After an all-time high at the start of the day, skepticism is returning to Wall Street – because the big corona stimulus package from Washington has been a long time coming.
The US stock exchanges took a breather at the end of the week. The Dow Jones lost 0.4 percent to 30,179 points. The technology-heavy one Nasdaq gave in 0.1 percent to 12,756 points and the broad one S&P 500 lost 0.4 percent to 3709 points. At the start of trading, all three indices had reached new highs. On a weekly basis, they also rose: the S&P by 1.25 percent, the Dow by 0.4 percent and the Nasdaq by three percent.
Wall Street investors are counting on Republicans and Democrats to agree on another bailout package for the US economy, which has been badly hit by the pandemic. Last but not least, rising unemployment and weak retail data are increasing the pressure on politicians. Both sides had recently expressed their optimism about further Covid aid. Thomas Hayes, an expert from asset management company Great Hill Capital, was confident: "We will see that this time around Christmas it will not be the Grinch, but Santa Claus."
"There is a clear deterioration in the US economy," said Luca Paolini, chief strategist at Pictet Asset Management. "The market is expecting a fiscal stimulus. There will be a big disappointment if there is no agreement." Added to this are the rapidly increasing new infections worldwide. It will be a while before the vaccinations that have started show the first positive effects.
Tesla soars before promotion to the S&P 500
Tesla caused a stir: the shares were listed before inclusion in the S&P 500 at times higher than ever before, to close with a plus of 0.4 percent. At Microsoft and Intel, there were major movements shortly before the close of trading. In a statement by the software manufacturer, it was said that they were working on their own processors for cloud services and the "Surface" series. Microsoft titles closed almost 0.4 percent lower, while the shares of chip manufacturer Intel fell 6.3 percent.
The papers of the vaccine developer Moderna gave way 2.6 percent. The US government expects the company's corona drug to be approved this Friday. US President Donald Trump wrote on Twitter that the drug had already been approved. The FDA was initially unavailable for comment.
Fedex shares fell 5.7 percent. The logistics group made leaps and bounds in profits, but did not give any outlook with reference to the ongoing uncertainty.
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