US Market Open Dec 24
US Market Open: Brexit deal and stimulus bill in focus
- US markets are called to open slightly higher today.
- European indices are trading lower as they prepare to close early for the holiday season.
- The UK and EU are expected to announce a Brexit deal today, while US markets are waiting to see if a government shutdown can be avoided next week.
- In forex, hopes of a deal saw cable climb to near its highest level since May 2018.
The S&P 500 is called to open 0.1% higher at 3698.4 after ending in slightly positive territory yesterday at 3694.7.
The Dow Jones is set to open broadly flat at 30194.0 from 30188.5 at the end of play on Wednesday.
US markets are open for a half-day today, closing early on account of Christmas Eve.
Start trading the opportunities with indices today.
European indices to end in negative territory
France’s CAC 40 was down 0.1% at 5528.3 after ending yesterday’s session at 5533.8.
Meanwhile, over the Channel, the FTSE 100 was down 0.2% at 6504.0 ahead of closing at 1230 GMT, from 6518.7 at the close yesterday. A significantly stronger pound and a longer-than-expected wait for the announcement of a Brexit deal limited its ability to end in positive territory.
Will there be a Brexit deal before Christmas?
The UK and the EU are expected to unveil a long-awaited Brexit deal later today after more than four years of negotiations. Talks continued last night and sources from both sides have suggested a deal could be announced today once the finer details have been finalised. Reporters are camped outside Number 10 waiting for a statement from UK prime minister Boris Johnson.
Although any deal will be welcomed by markets ahead of the Christmas break, the devil will be in the detail to figure out exactly what the UK and the EU have agreed to. Reports suggest that while the deal is expected to maintain tariff-free trade and cover other important areas like security, it won’t cover the likes of services – which is significant for the UK considering it accounts for 80% of jobs.
The timing is significant considering there is just one week before December 31. Any deal would need to be pushed through the UK parliament before then, whilst the EU is expected to provisionally accept any agreement before the deadline and then formally approve it next year.
City Index analyst Joshua Warner writes this morning about what a last-minute Brexit deal could mean for the FTSE 100.
Will a stimulus bill be passed to avoid a US government shutdown?
In the US, attention is on whether the country can avoid a government shutdown at the start of next week after president Donald Trump demanded dramatic changes be made to a $2.3 trillion stimulus package to fund federal government and help the coronavirus-hit economy.
Democrats and Republicans wrangled over the bill, which includes a $892 billion coronavirus relief package, for months before striking an agreement earlier this week only for it to be described as a ‘disgrace’ by the president, who must sign it for it to be approved.
The president has not said he will veto the bill but has prompted fears that the bill will go unsigned before existing federal funds run out on December 28, which could cause a government shutdown. Democrats have said they are willing to amend the deal but have urged the president not to risk the entire bill because of disputes over certain areas.
In a separate clash with Congress, Trump also vetoed a $740 billion defence bill yesterday after the president claimed it was a ‘gift’ to China and Russia because it failed to take critical elements of the country’s national security into account. The bill has the support of Congress and Trump could be the first president to block the bill in over 60 years.
Alibaba shares plunge as China launches monopoly investigation
China has launched an antitrust investigation into Alibaba Group as part of a wider crackdown on monopolies being formed by some of its biggest internet and tech companies. It is also expected to separately investigate Alibaba’s tech and financial subsidiary Ant Group.
An editorial in the Communist Party’s People’s Daily newspaper said if ‘monopoly is tolerated, and companies are allowed to expand in a disorderly and barbarian manner, the industry won’t develop in a healthy, and sustainable way’.
It comes after Ant Group’s planned initial public offering – which would have been the largest listing in the world - was put on the backburner earlier this year due to regulatory pressure from China after Alibaba’s chief executive Jack Ma criticised the country’s regulatory system.
Forex: GBP/USD nears highest level since May 2018
Hopes of a Brexit deal in time for Christmas sent the pound higher this morning, and the gradual re-opening of the UK-France border was also providing support.
GBP/USD traded at 1.35880 at midday, up 0.7% from 1.34953 at the end of trade on Wednesday. It briefly touched close to its highest level since May 2018 in earlier trade.
EUR/GBP was down 0.6% at 0.89723 at midday – with the pound sitting at its strongest level against the euro since the start of December – after ending yesterday’s session at 0.90303.
Meanwhile, EUR/USD was broadly flat at 1.21915 from 1.21870.
Start trading the opportunities in the forex market today.
Commodities: Brent falls but holds steady above $50
Start trading the volatility in oil prices today.
Gold was trading slightly higher at $1875 an ounce at midday from $1873 at yesterday’s close.
Start trading gold and other precious metals today.
Market-moving events in the economic calendar
You can view all the scheduled events for today using our economic calendar, and keep up to date with the latest market news and analysis here.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.
ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.
City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.
The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.
The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.
The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.
StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.
This advertisement has not been reviewed by the Monetary Authority of Singapore.
© City Index 2024