Dec,23 2020 ESH1 3684.00 +6.75 NQH1 12714.50 +5.50 8:00 AM EST
Global:
President Trump threw Congress’s hard-won relief package into doubt with a surprise attack on the bill, calling it a “disgrace.” He demanded stimulus checks be raised to $2,000 from $600. Nancy Pelosi endorsed the idea, saying the House would try to pass an additional measure. Trump didn’t indicate whether he would veto the $2.3 trillion spending bill. If he doesn’t sign by Dec. 28, government funding will lapse, triggering a partial shutdown.
U.S. equity futures edged higher with European stocks as investors assessed the impact of President Donald Trump’s demand for changes to pandemic relief legislation. Contracts on the S&P 500 reversed a decline of as much as 0.7% after Trump attacked the coronavirus relief bill. The president is demanding that lawmakers increase the stimulus checks due to go out to most Americans to $2,000 from $600 in the same week that Congress passed the $900 billion bipartisan package. The dollar slipped.
Asia:
The outlook for Asian companies in the next six months tracked by the Thomson Reuters/INSEAD Asian Business Sentiment Index jumped to 62 this quarter from 53 in the third quarter. The latest number according to the survey of 101 firms across 11 Asia-Pacific countries was the highest since the fourth quarter of 2019. Asian equity markets are mostly green today, ignoring the Presidential veto threats weighing on US equity futures. The Nikkei has risen a modest 0.15%, with the Kospi climbing 0.70%, perhaps reflecting its tech-heavy nature. Mainland China’s Shanghai Composite has increased strongly by 0.60%, with the CSI 300 up 0.35%. The PBOC CNY 100 bio liquidity injection this morning via the reverse repo may be contributing to the brighter start from China equities. Hong Kong is just 0.10% higher thus far.
Europe:
European shares rose on Wednesday as a report that a Brexit trade deal could be struck later in the day cheered investors amid concerns over the passage of a much-awaited U.S. pandemic aid bill. The pan-European STOXX 600 index traded 0.4% higher after political editor Robert Peston at Britain’s ITV said a Brexit trade deal between the United Kingdom and the European Union is possible on Wednesday after progress in talks on fishing rights. However, London’s FTSE 100 lagged as the pound gained on the news and weighed on shares of internationally focused firms on the index.
Currencies:
The euro rose to $1.22 and the dollar fell on Wednesday as foreign exchange traders looked beyond U.S. President Donald Trump’s threat to block a $892 billion COVID-19 aid package. The euro rose to $1.22 and the dollar fell on Wednesday as foreign exchange traders looked beyond U.S. Presidents possible veto of the US aid bill.
Gold/Silver
Gold snapped a three-day drop as the dollar retreated after President Donald Trump’s surprise request for changes to the stimulus bill passed by Congress.
Trump said the $900 billion bill included “wasteful and unnecessary” items and demanded that lawmakers increase the stimulus checks due to go out to most Americans.
Investors are also watching for further government action to counter a new faster-spreading variant of Covid-19. A wider swath of the U.K. would be ordered into a more-severe lockdown under a plan being considered by government officials and the new virus strain is possibly already in the U.S., Germany, France and Switzerland.
Copper prices pushed back towards multi-year highs on Wednesday, with stock markets and oil prices also rising and the dollar weakening as investors spooked by the emergence of a more contagious variant of the coronavirus regained their nerve.
OIL/Nat Gas
Oil steadied on Wednesday after earlier losses sparked by an unexpected rise in U.S. crude oil inventories, and as President Donald Trump rattled markets by threatening not to sign a long-awaited U.S. COVID-19 relief bill.
Brent crude futures were up 12 cents, or 0.2%, to $50.20 a barrel at 1046 GMT, while U.S. West Texas Intermediate (WTI) crude futures climbed 9 cents, or 0.2%, to $47.11 a barrel. Both contracts fell nearly $1 earlier in the session.
Treasuries
Treasury futures continue to fade after Asia, early London session gains, leaving yields cheaper by 1bp across long-end of the curve. Early risk-off saw yields grind lower after President Trump asked Congress to amend the latest spending bill to remove some items and increase stimulus checks. S&P e-minis soon unwound the drop, pushing Treasury yields back toward middle of Tuesday range.
- Treasury 10-year yields around 0.925%, outperforming gilts by 1bp with a Brexit deal still in the balance — U.K. pound is higher by 0.4%; bunds trade broadly inline with Treasuries
Economic Numbers/ Fed Speakers
A flood of U.S. eco data is due. The holiday shortened-week means we get personal income and spending, the PCE deflator, durable goods and initial jobless claims, to name a few. Bloomberg Economics warned the numbers will be sobering. In particular, personal income and spending may show contractions that set the tone for moribund growth under Joe Biden. Home sales may be a bright spot. Consensus sees jobless claims dipping slightly.
Domestic Equities
Dec 23 (Reuters) – U.S. stock index futures rose slightly on Wednesday as investors appeared to have shrugged off President Donald Trump’s threat to not sign a COVID-19 stimulus bill, while also waiting for a reading on weekly jobless claims and consumer spending data.
In a video posted on Twitter, Trump said the hard-fought pandemic relief package worth $892 billion should be amended to increase the amount in the stimulus checks to $2,000 for individuals, instead of the “ridiculously low” $600.
U.S. futures had dropped as much as 1% in Asian trade, before recovering later in the session.
Advancers
Equity movers in early trading, as of 7:34am in New York
- OCGN +82.6% (+$0.66); Ocugen Gains Premarket, Adding to Gains on Vaccine Pact
- LIZI +38.1% (+$1.38)
- KOPN +36.9% (+$1.01)
- UAVS +31.1% (+$2.11)
- SCPS +29.7% (+$3.89)
- CLNE +17.8% (+$1.46)
- MGNI +17.3% (+$4.69)
- SUPN +15.5% (+$3.48)
- SOL +11.7% (+$1.40)
- IACA +10.2% (+$1.22)
- NBAC +10.1% (+$1.87)
- LGVW +9.2% (+$1.59)
Decliners
- FENG -49.6% (-$1.22)
- FUBO -8.1% (-$5); FuboTV Cut at BMO on Valuation; Stock Doubled in Last Five Days
- BRPA -6.4% (-$2.44)
- CVAC -5.8% (-$6.34); Moderna Poised for Four-Day Drop as Vaccine Euphoria Eases
- MRNA -4.6% (-$5.84)
- ARCT -4.3% (-$5.08); Arcturus Therapeutics Cut to Sell at Roth Capital; PT $77
