US Close – Stimulus uncertainty, jobless claims surge, ECB delivers, tech’s bubbly feeling
December 10, 2020SharePrint
US stocks are struggling for direction as investor skepticism over a holiday stimulus deal grows, jobless claims are starting to trend higher, and as the red-hot IPO market continues. The ECB delivered a well-telegraphed boost to their stimulus program, likely paving the way for expectations for the Fed to do their part in expanding their bond-buying program next week. The Nasdaq is once again outperforming its peers as back-to-back successful IPOs from DoorDash (NYSE listed) and Airbnb (Nasdaq listed) continue to drive interest into a flurry of companies that aim to be the next FAANG stocks. Airbnb’s trading debut was well received with an opening price of USD146, a 115% jump from the USD68 IPO price. Roblox, a virtual-world gaming platform, is the next big IPO everyone has their eyes on, but it doesn’t stop there. ContextLogic Inc and Affirm H
11th Dec 20, 7:56am
The USD is back under pressure after weak US jobless claims figures and so is GBP after the odds of no trade deal between the EU and UK increased. Commodity currencies are leading the charge, with the AUD blasting up through 0.75 and the NZD back towards the top end of its recent range. The ECB met expectations with the expansion of its bond buying programme.
The S&P500 opened on a soft note, not helped by the poor read from US jobless claims, but market sentiment has improved on a more positive vibe from fiscal stimulus talks. The S&P500 is back to almost flat, while the Nasdaq index shows a small gain.
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Event Wrap
US Nov. CPI rose +0.2%m/m (est. +0.1%m/m), for an annual pace of 1.2% (vs est 1.1%). The ex-food and energy measure rose 0.2% for an annual pace of 1.6% (vs est 1.5%).
US weekly initial jobless claims at 835k were higher than anticipated (est. 725k, as were continuing claims (5.757m, est. 5.21m), highlighting the impact of the increased cases of Covid across the country.
US fiscal stimulus talks: Senate Majority Leader McConnell is reportedly now on board with Mnuchin’s $916 billion proposal, citing the need to do “everything we can” to help the economy. House Speaker Pelosi saw the other $908 billion plan still being drafted by a bipartisan group of lawmakers as the best path to a deal.