US Market Open Indices to open higher on vaccine and stimulus hopes

Matt Weller
By :  ,  Head of Market Research

US Market Open: Indices to open higher on vaccine and stimulus hopes

  • US indices are set to open higher today as the first coronavirus vaccine begins to be rolled-out in the US and on higher hopes that a new fiscal stimulus package can be introduced this week.
  • European markets were finding higher ground at midday Monday as the EU’s chief negotiator Michel Barnier said a Brexit deal was still possible, but the FTSE 100 continues to underperform as stronger sterling limits its gains.
  • Sterling gained ground as it recouped some of the losses of last week, while the dollar has also softened against the pound and the euro.
  • In commodities, oil pushed back above the $50 per barrel mark as vaccine rollouts improve the outlook for demand, while gold continued to fall as appetite for the safe-haven asset wanes.

US indices to open higher

The S&P 500 is called to open at 3688.7, 0.7% higher from 3662.5 at the close on Friday.

The Dow Jones is set to open 0.7% higher at 30270.0 from 30054.0 at the end of the last week. It trades marginally below the record high seen last Wednesday.

Start trading the opportunities with indices today.

US stimulus hopes rise as time ticks down

Another week of tense talks are expected over a new fiscal stimulus package. The Senate voted in favour of a one-week stopgap measure to keep funding from running out, but it builds pressure that a longer-term deal must be agreed before the end of the week.

There are currently two packages on the table, one from the Republican White House and another by a bipartisan group of Senators from both sides. There remain differences about certain matters, like liability protection for businesses and the amount that should be paid out to those who have been made unemployed during the pandemic.

The bipartisan group of senators worked over the weekend to ensure their bill was ready to be tabled Monday. Reuters reported the bill could be split into two to improve the chances of approval – into a $748 billion package for small businesses, the unemployed and vaccine distribution, and a $160 billion measure for state and local governments. There is the added component of the Federal Reserve’s meeting on Wednesday.

First US vaccinations expected today

The first doses of the Pfizer-BioNTech vaccine are expected to be administered today after regulators approved it for emergency use late last week. The vaccine is being distributed from FedEx and United Parcel Service hubs, with the first inoculations expected to take place near one of the hubs in Tennessee and Kentucky. The rollout comes soon after incoming president Joe Biden promised to get 100 million people vaccinated within his first 100 days of officially taking office on January 20.

It is a landmark day for the country, which saw coronavirus cases reach another peak on Friday. Neighbour Canada is also expected to begin vaccinating its population this week after the first doses arrived over the weekend, building on the UK’s programme that started last week. Still, the world is aware that the vaccination programme will be long and complex and that the pandemic is far from over.

AstraZeneca shares plunge on $39 billion Alexion takeover

AstraZeneca shares dived on Monday after announcing it plans to buy US biotech outfit Alexion Pharmaceuticals for $39 billion. The stock and shares deal is AstraZeneca’s largest takeover to date, paying $60 in cash and the rest in stock through American Depositary Shares. City Index analyst Nicolas Suiffet looks at the AstraZeneca share price from a technical view.

Electronic Arts enters takeover race for Codemasters

Video game giant Electronic Arts has struck a deal to buy UK-listed Codemasters for $1.2 billion after outbidding a rival offer from Take-Two Interactive Software. Codemasters said it was recommending a 604 pence cash offer from EA. Take-Two said it was evaluating its position.

European indices push higher on Brexit hopes

The Euro STOXX Index traded 1% higher at midday at 3528.5 from 3493.2 at the end of last week.

France’s CAC 40 was up 0.9% at 5572.0 from 5523.5 at Friday’s close.

Germany’s DAX was up 1% at 13279.0 from 13142.1. Germany is preparing to enter another national lockdown starting from Wednesday after reporting its highest number of coronavirus cases last week, topping 30,000 in a single day. The lockdown will run until January 10 and force non-essential shops to close, joining most of the country’s hospitality industry. 

Meanwhile, over the Channel, the FTSE 100 was only up 0.1% at 6576.0 at midday from 6566.3 at the end of play on Friday.

City Index analyst Fiona Cincotta writes this morning that the strength in the pound, boosted by Brexit talks being extended, has dragged the UK’s blue-chip index lower, resulting in it continuing to underperform its European peers.

Start trading the opportunities with indices today.

Barnier says Brexit deal ‘still possible’

The EU’s chief negotiator Michel Barnier said the bloc is ‘going to give every chance to this agreement’ and said it is ‘still possible’ that a breakthrough can be found before December 31. However, he conceded that two conditions have not met the EU’s expectations. The first is the level playing field and the second is over reciprocal access to markets and fishing waters.

It sets a more optimistic tone after UK prime minister Boris Johnson, soon after agreeing to extend negotiations on Sunday, warned ‘the most likely’ outcome was no-deal. You can read more about what a no-deal Brexit would mean for markets here.

Forex: Dollar loses ground as sterling rises

Sterling was recouping losses booked last week as Brexit hopes remain alive, while the dollar was softening as markets unwound positions as appetite for risk increases during the rollout of a vaccine in the US.

EUR/GBP traded at 0.90555 at midday, down 1.1% from 0.91608 at the close on Friday.

Meanwhile, EUR/USD was at 1.21567, up 0.2% from 1.21130 at Friday’s close, whilst GBP/USD was up 1.4% at 1.34216 from 1.32380 at the close of play last week.

Start trading the opportunities in the forex market today.

The most drastic movements in the currency markets in early afternoon trade, according to data from Reuters, are as follows:

FX Pair


Net Change



















Commodities: Oil prices find ground above $50

Brent traded at $50.60 at midday on Monday from $49.94 at the close of trade on Friday, but still below last Thursday, when Brent touched its highest level since early March at $51.04. WTI traded at $47.24 from $46.64.

The Algerian energy minister confirmed that OPEC+ intends to meet on January 4 to decide what changes need to be to made to supply to balance the market.

Start trading the volatility in oil prices today.

Gold traded at $1828.0 at midday, down from $1839.2 at the end of play last week, as appetite for the safe-haven asset continues to unwind on news of vaccines being rolled out.

Start trading gold and other precious metals today.  

Market-moving events in the economic calendar

The economic calendar is very light for the rest of the day. The only notable event is Australia’s Westpac consumer survey for the fourth-quarter at 2100 GMT, ahead of the Reserve Bank of Australia publishing the minutes from its recent interest rate decision overnight.

The calendar gets busy later this week, with central banks taking centre stage. The Bank of Canada is in focus on Tuesday, the US Federal Reserve on Wednesday, the Bank of England on Thursday, and the Bank of Japan rounding off the week on Friday.

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.

Related tags: Equities Indices Forex

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