US stock indexes took different routes on Monday, with the Nasdaq managing to secure a gain. The S&P 500 and the Dow closed in the red, dragged down by Walt Disney. Dow Jones managed to update the record high before closing lower. The US is officially rolling out the COVID vaccine produced by Pfizer. However, the number of cases in the US and Europe is surging. New York City Mayor Bill de Blasio warned that the city should be ready for a full shutdown. Other US regions may also implement tougher restrictions. Since the beginning of the year, the US reported over 16 million COVID infections, with the accelerating death toll surpassing the 300,000 mark. The government administered the first shots of the new vaccine to healthcare workers. Still, Pfizer fell about 5%.
The bearishness caused by the surging cases was capped by optimism surrounding the fresh stimulus to be implemented by the government. Negotiators in the Congress got closer to a consensus on the $908 billion package. Lawmakers proposed to split the stimulus bill into two parts: the greater proposal worth $748 billion would include support for vaccine distribution and jobless benefits, and a $160 billion bill would include state support.
Walt Disney fell over 3% after BMO Capital Markets downgraded the stock after a decent rally. The stock dragged down the S&P 500, which fell 0.44%. Elsewhere, Dow declined by 0.62%, while Nasdaq added 0.50%. The S&P’s consumer discretionary sector was the best performer, gaining 1%. The energy sector slumped more than 3%.
Alexion Pharmaceuticals surged about 30% following the proposal from British AstraZeneca to buy it for $39 billion. AstraZeneca’s shares listed in the US fell about 9%, as investors are pricing in the costs of one of the biggest deals in 2020.
Tesla jumped another 5% ahead of the S&P 500 listing, despite reporting production delays.
The Federal Trade Commission requires nine tech giants, including Amazon, Facebook, Twitter, Google-owned YouTube, and TikTok owner ByteDance, to explain how they use personal data. The companies should respond in 45 days.
In Asia, stocks are mostly bearish on Tuesday, as investors are worried about tighter restrictions in many countries. Meanwhile, the market’s reliance on positive vaccine-related headlines has oversaturated.
At the time of writing, China’s Shanghai Composite shows no direction, while the Shenzhen Component has increased by 0.47%. Both indexes opened lower. China’s industrial production and retail sales data was mixed, as industrial production rose last month 7% y/y, in line with expectations and after October’s 6.9% growth. Retail sales rose 5% y/y in November, below the predicted growth of 5.2% but up from October’s 4.3% increase.
E-commerce giant Alibaba declined after China imposed fines on its tech giants and warned of more antitrust scrutiny. The government also announced probes into deals related to Alibaba and Tencent.
China’s Baidu is thinking about producing its own electric car, sources familiar with the matter told Reuters.
Hong Kong’s Hang Seng Index is down 0.61%.
Japan’s Nikkei 225 closed 0.17% lower. The Tankan Large Manufacturers Index in the fourth quarter came in at -10, better than -15 in forecasts and the Q3 -27 reading. The Tankan Large Non-Manufacturers Index also performed better than expected.
South Korea’s KOSPI is down 0.19%.
In Australia, the ASX 200 closed 0.43% lower, as tensions with China deteriorated on reports that Beijing has banned imports of Australian coal.
In the commodity market, oil prices are declining on fears of tighter coronavirus restrictions in the US and Europe. Also, OPEC expects a slower recovery in demand in 2021. WTI and Brent are both down 0.74%. London required bars and restaurants to close, as the rate of infections is accelerating.
Gold is bullish as investors focus on the surging COVID cases rather than the vaccine rollout in the US, the UK, and Canada. Gold futures have gained over 0.60% to $1,843.
In FX, the US dollar continues to decline, as investors assess the stimulus talks progress. The USD Index is down 0.03% to 90.618. EUR/USD is up 0.07% to 1.2151.
The pound is increasing against both majors following the comments made by EU’s chief Brexit negotiator Michel Barnier, who said that a trade deal was still possible. Negotiations continue even after another deadline expired on Sunday, but officials on both sides hinted that a no-deal was more likely.
