US stock indexes updated their record highs on Thursday amid ongoing optimism over a COVID relief bill, offsetting worries about the economic impact of the pandemic.
Republicans and Democrats seem to agree on the next round of stimulus to reduce the impact of a pandemic that killed over 309,000 US citizens. The unexpected increase in initial jobless claims stresses the need for the relief bill. Initial applications for unemployment benefits rose 23,000 last week to 885,000, while analysts expected a decline to 800,000. President Donald Trump said in a tweet that stimulus talks were looking very good.
Besides the stimulus hopes, investor sentiment was buoyed by the vaccine news, as Moderna is waiting for approval for its COVID vaccine, which will be the second one endorsed by US regulators. An advisory panel to the FDA recommended the approval of Moderna’s vaccine with an overwhelming vote of 20-0. The share price of the vaccine maker surged over 5%.
The S&P 500 rose 0.59%, the Dow added 0.49%, and Nasdaq rose 0.84% to update the record peak for the third session in a row. The S&P 500 has gained about 15% so far this year, despite the March nosedive.
Real estate, materials, and health were among the best performers among the S&P’s 11 major sectors on Thursday.
In individual corporate news, Google-parent Alphabet fell about 1% after more US states filed an antitrust suit, charging the tech giant of extending its search engine to dominate televisions, smart speakers, and cars. This is the third antitrust lawsuit against Google since October. In other news, Google passed the EU antitrust test to get the approval for its $2.1 billion bid for Fitbit, which manufactures wearable devices.
Accenture surged almost 7% after the tech company improved its annual sales forecast.
Coca-Cola is about to cut around 2,200 jobs globally as part of its workforce restructuring in response to the pandemic. More than half of the job cuts will be in the US.
Microsoft fell about 0.7% after reports that it was hacked in connection with the recent attack on SolarWinds’ management software. Hackers infiltrated Microsoft products, though it’s not known how many users were affected.
In Asia, stocks are bearish on Friday, despite stimulus optimism in the US.
At the time of writing, China’s Shanghai Composite is down 0.27%, and the Shenzhen Component has lost 0.29%. Both indexes opened higher.
The US is about to add dozens of Chinese companies to its trade blacklist later today, people familiar with the matter told Reuters. The list will include China’s top chipmaker SMIC. Trump’s move comes weeks ahead of Joe Biden’s inauguration on January 20.
Hong Kong’s Hang Seng Index is down 0.77%
Japan’s Nikkei 225 closed 0.16% lower. The Bank of Japan maintained the interest rate unchanged at -0.10%. Japan’s core consumer prices tumbled last month at their fastest pace in 10 years as the pandemic deteriorated demand. Economists are worried about a return to deflation.
South Korea’s KOSPI has increased by 0.05%. In Australia, the ASX 200 closed 1.20% lower.
In the commodity market, oil prices are retreating amid worries that the surging number of COVID cases will maintain the tough restrictions in many regions worldwide. While crude prices departed from their nine-month peaks, they’re set to end the week higher for the seventh straight week. WTI is down 0.25%, and Brent has lost 0.16%. So far, more than 73.5 million people worldwide have been tested positive for COVID, and 1,654,920 of them have died.
Gold is also retreating as stimulus talks continue in the US Congress. The precious metal has lost 0.20% to $1,886, but it is set to end the third consecutive week higher.
In FX, the US dollar is trying to recover, but this seems to be a temporary rebound before bears retake control. The USD Index is up 0.10% to 89.828. EUR/USD is down 0.09% to 1.2254.
The pound has declined against both majors as Brexit talks optimism faded after UK Prime Minister Boris Johnson said that a no-deal is more likely unless the EU doesn’t ease its stance on fisheries.
