U.S. Stocks May Move Back To The Upside After Yesterday’s Downturn
After turning lower over the course of the previous session, stocks may move back to the upside in early trading on Wednesday. The major index futures are currently pointing to a moderately higher open for the markets, with the Dow futures up by 70 points.
Traders may make another attempt at window dressing going into the end of the year after profit taking set in following an early advance on Tuesday.
News that U.K. regulators have approved a coronavirus vaccine developed by AstraZeneca (AZN) and the University of Oxford for emergency use may also generate some positive sentiment.
Nonetheless, the upcoming New Year’s Day holiday on Friday is likely to keep overall trading activity relatively subdued.
Traders are also likely to keep an eye on developments in Washington, as lawmakers haggle over increasing stimulus checks to $2,000 from $600.
Senate Majority Leader Mitch McConnell, R-Ken., blocked Democratic efforts to fast-track a House approved measure to increase the size of the checks.
McConnell has instead proposed a bill that would tie the bigger stimulus checks to the repeal of a provision that protects social media platforms and the creation of an election fraud commission.
With Democrats likely to oppose the combined package, Senate Minority Leader Chuck Schumer, D-N.Y., described the move by McConnell as a “blatant attempt to deprive Americans of a $2,000 survival check.”
Political observers have suggested McConnell added the so-called “poison pill” to give cover to Georgia Senators seeking re-election in next week’s crucial run-offs.
Just after the start of trading, MNI Indicators is scheduled to release its report on Chicago-area business activity in the month of December.
The Chicago business barometer is expected to edge down to 57.0 in December from 58.2 in November, although a reading above 50 would still indicate growth.
The National Association of Realtors is also due to release its report on pending home sales in the month of November. Pending home sales are expected to come in unchanged.
A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
Stocks failed to sustain an initial move to the upside and moved modestly lower over the course of the trading session on Tuesday. With the drop on the day, the major averages pulled back off Monday’s record closing highs.
The major averages ended the day in negative territory but off their lows of the session. The Dow dipped 68.30 points or 0.2 percent to 30,335.67, the Nasdaq fell 49.20 points or 0.4 percent to 12,850.22 and the S&P 500 slipped 8.32 points or 0.2 percent to 3,727.04.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index slid by 0.5 percent, while China’s Shanghai Composite Index jumped by 1.1 percent.
Meanwhile, the major European markets have moved modestly lower on the day. While the German DAX Index has dipped by 0.3 percent, the French CAC 40 Index is down by 0.1 percent and the U.K.’s FTSE 100 Index is just below the unchanged line.
In commodities trading, crude oil futures are inching up $0.16 to $48.16 a barrel after rising $0.38 to $48 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,885.90, up $3 compared to the previous session’s close of $1,882.90. On Tuesday, gold edged up $2.50.
On the currency front, the U.S. dollar is trading at 103.01 yen compared to the 103.58 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.2286 compared to yesterday’s $1.2249.
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