US Market Open: Holding steady as Georgia Senate runoffs begin

• US markets are expected to open broadly flat, as voters in Georgia head to the polls in a crucial vote that will decide which party controls the Senate.
• European markets were mixed at midday, as the UK unveiled new economic support as it enters its third national lockdown and Germany considers extending its own restrictions.
• In commodities, oil prices headed higher as negotiations between OPEC+ members continues today, as the group decides how to balance supply and demand in the current environment.
• Gold prices also surged higher to their highest level in almost two months.

US markets hold steady

The S&P 500 is called to open slightly lower today at 3703.6 after ending yesterday’s session at 3705.7.

The Dow Jones is set to open broadly flat at 30236.0 from 30238.0 at the last close.

Start trading the opportunities with indices today.

Georgia Senate runoff races heat up

The US Senate runoff races are to be held today, as voters head to the polls to decide who controls the Senate. Two seats are up for grabs and both are currently held by the Republicans, giving the party a slim majority. If they maintain their seats, then the Senate will remain under their control. However, if the Democrats can poach both seats then the Senate will be a 50:50 split, and incoming vice-president Kamala Harris would be given the deciding vote, swinging control to the Democrats.

President Donald Trump and president-elect Joe Biden both held rallies in Georgia on Monday night. Trump’s rally continued trumpeting unfounded claims that the election was rigged, with the president stating ‘they’re not taking this White House, we’re gonna fight like hell’. Meanwhile, Biden has focused on resetting the political stage and convincing voters that a Democrat-controlled Senate would allow him to get his proposals on everything from healthcare to the economic recovery through the political system.

Joe Biden’s victory in the November election is to be formally certified on Wednesday during a joint session of Congress. Trump said he hopes vice-president Mike Pence, who will oversee the session, ‘comes through for us’ by helping overturn the election result, which he has refused to accept thus far.

The Senate runoff races will go a long way in deciding how easily the new president will be able to push through his policies after he takes office on January 20. For example, the party has promised to push through $2,000 stimulus cheques for Americans if it wins after Republicans blocked the proposal last month.

NYSE makes U-turn on Chinese telecoms stocks

The New York Stock Exchange has made a surprise U-turn on its decision to delist three Chinese telecoms giants, stating it has decided to halt the delisting ‘in light of further consultation with relevant regulatory authorities’.

The NYSE had originally said it would begin delisting China Mobile, China Telecom and China Unicom Hong Kong from January 11 as part of an executive order signed by president Donald Trump, who has remained steadfast in his position against Chinese companies over security concerns.

The short statement failed to settle the issue and leaves the matter up in the air. However, with Trump due to leave office later this month, the issue may subside depending on how president-elect Joe Biden approaches the issue.

European markets mixed at midday

The Euro STOXX Index traded 0.2% lower at midday at 3545.5 from 3553.1 at the end of play on Monday.

France’s CAC 40 was down 0.2% at 5558.0 from 5570.3, while Germany’s DAX was also 0.2% lower at 13665.0 from 13695.2.

Meanwhile, over the Channel, the FTSE 100 was up 0.1% at 6568.5 from 6558.8 at the last close.

You can read the top UK stock news for today here. Next shares have soared as it banks on a recovery next year, Morrisons reported strong growth over Christmas, while Ferrexpo announced it will pay a special dividend.

UK government unveils new £4.6 billion COVID-19 grants

UK chancellor Rishi Sunak has unveiled a new £4.6 billion support package for businesses that will be hardest-hit by the country’s third national lockdown that was announced yesterday. This will allow retail, hospitality and leisure companies to get one-off grants worth up to £9,000 per property.

Sunak said the grants were aimed at helping businesses ‘get through the months ahead’ and keep people employed. The latest national lockdown is set to last until at least mid-February and could run into March – with the timeframe dependent on how quickly vaccines can be rolled out and the rate that cases, hospitalisations and deaths fall as a result of tighter restrictions.

Prime minister Boris Johnson will hold another press conference at 1700 GMT alongside chief medical officer for England Chris Whitty and chief scientific adviser Patrick Vallance.

Germany expected to extend lockdown to end of January

German chancellor Angela Merkel will meet with regional leaders today to discuss whether the existing lockdown measures should be extended. Germany’s current lockdown started on December 16 and is due to end on January 10. Various German media outlets suggest the existing lockdown will be extended until the end of January, with Reuters reporting 14 out of the country’s 16 states support prolonging current restrictions. However, there is thought to be disagreement about how long the extension should last for.

The introduction of further lockdown measures paints a bleak picture for Europe. It will cause a sharp decline in the economy again in the first quarter of the year and, following the contraction seen in the final quarter of 2020, puts it on course to enter another recession and throws cold water on hopes that economies could stage a speedy recovery.

Forex: Dollar weakness continues

GBP/USD was trading at 1.35890 at midday, up 0.1% from 1.35697 at yesterday’s close.

EUR/USD traded at 1.22835, up 0.3% from 1.22474 at the end of play on Monday. City Index analyst Matt Weller has a technical look at EUR/USD ahead of the Georgia Senate runoff elections.

Meanwhile, EUR/GBP was up 0.1% at 0.90396 after ending yesterday at 0.90285.

Start trading the opportunities in the forex market today.

Commodities: Oil prices rise as OPEC+ talks continue

Brent traded at $52.03 at midday, 2.5% higher than $50.77 at yesterday’s close, while WTI followed higher to $48.54 from $47.40.

OPEC+ held their first meeting of the year yesterday to discuss how to balance supply and demand in the current environment. The group had to cut output by record amounts in response to the pandemic last year but is expected to steadily raise output by up to 2 million barrels per day this year.

However, there is disagreement over how quickly the global economy can recover and the group could not agree on output levels yesterday, pushing negotiations into Tuesday. Reports suggest Saudi Arabia is among those arguing to hold current production steady, while Russia is arguing for higher output. Talks will resume from 1430 GMT today.

WTI will remain in focus later today when the API weekly crude oil stocks is published at 2130 GMT, providing an insight into the level of demand in the US.

Start trading the volatility in oil prices today.

Gold was trading at $1949 at midday, rising from $1942 at the end of play yesterday to hit its highest level since early November.

City Index analyst Fiona Cincotta has a look at the gold price ahead of the Georgia Senate runoff races, with gold bulls rooting for a Democratic win.

Start trading gold and other precious metals today.

Market-moving events in the economic calendar

The US takes centre stage in the economic calendar today, with the Institute for Supply Management’s manufacturing employment index, new orders, PMI and prices due at 1500 GMT.

The presidents of the US Federal Reserve Banks of New York and Chicago will give speeches at 2045 GMT.

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.