US stock futures are in wait-and-see mode, as Congress finally secured a COVID relief deal.
At the time of writing, the S&P 500 futures are down 0.12%, while futures on the Dow and Nasdaq are up 0.08%, and 0.24%, respectively.
When the market opens today, Tesla will debut on the S&P 500 with a 1.69% weighting, which is the fifth largest one, after Apple, Microsoft, Amazon, and Facebook. On Friday, the Tesla stock surged about 6% to close at an all-time high at $695. The share price has jumped over 700% so far this year.
Senate Majority Leader Mitch McConnell and Minority Leader Chuck Schumer stated that members of Congress had reached consensus on a stimulus package worth $900 billion. The bill will be put to the vote later today. While this major event has been already priced in, the stimulus package is expected to support equities and favor risk assets at the expense of safe-havens. The bill will include direct payments to the unemployed.
On Friday, the FDA granted Moderna an emergency authorization for its COVID vaccine, which is the second one. Previously, Pfizer got the green light from the regulator for its vaccine produced in collaboration with German BioNTech.
Nike improved on Friday its full-year revenue forecast, as demand for outdoor sportswear surged amid the pandemic. The share price rose over 5% in after-hours trading. It has gained about 37% since the beginning of the year. The pandemic has encouraged many people to consider activities such as running or biking, driving demand for sportswear.
In Asia, stocks are mixed but bears dominate on Monday, as investors are discussing the new strain of COVID-19 that showed up in the UK and is spreading rapidly. UK Health Secretary Matt Hancock said the new strain was “out of control.” The UK government has introduced an emergency lockdown that requires people in London and southeastern England to stay at home. Many countries have banned flights from the UK.
At the time of writing, China’s Shanghai Composite is up 0.76%, and the Shenzhen Component jumped 1.87%. The People’s Bank of China maintained its benchmark lending rate for corporate and household loans at the same level for an eighth straight month, in line with analysts’ expectations. The one-year loan prime rate was left at 3.85%, and the five-year loan prime rate maintained at 4.65%.
Tensions between the US and China continue to deteriorate as Beijing might fight back after the US blacklisted over 60 Chinese firms, including China’s largest semiconductor maker.
Hong Kong’s Hang Seng Index has dropped 0.43%.
Japan’sNikkei 225 fell 0.18%. South Korea’s KOSPI has managed to recover and is up 0.23%.
In Australia, the ASX 200 fell 0.08%.
In the commodity market, oil prices have tumbled over 3% as investors are worried that the new COVID strain found in the UK would force more lockdown and thus hit demand for crude. Elsewhere, gold is leveraging its safe-haven asset status and exceeded the $1,900 mark for the first time since early November. Futures on the precious metal are up about 1%.
In FX, the US dollar is increasing on the same demand for safe-havens. The USD Index is up 0.52% to 90.425. EUR/USD is down 0.58% to 1.2184. The sterling has tumbled about 1.50% against the USD and over 0.80% against the euro amid the fresh emergency lockdown.
Meanwhile, investors are watching the impressive rally of the cryptocurrency market, as Bitcoin has recently updated the record high for the first time since December 2017 to consolidate above $20,000. The largest cryptocurrency by market cap is now trading at $24,000, gaining over 220% so far this year. Ethereum has surged over 400% YTD, rallying as the second-largest cryptocurrency is adopting a major update called Ethereum 2.0.
While many institutional investors are betting on Bitcoin and other digital currencies for their capabilities to act as a store of value, especially during the pandemic, another key aspect attracting enthusiasts is the technology underpinning cryptocurrencies – blockchain. Also called distributed ledger technology (DLT), it can be used for any use case by providing private, transparent, reliable, effective and efficient day-to-day solutions at a cheaper cost. Blockchain is expected to transform many industries, starting with finance. The COVID pandemic has forced a rapid adoption of digital solutions, which favors blockchain – a technology that encourages automation thanks to the smart contract feature. The technology is already implemented at various levels in many sectors, but more adoption is expected next year, as more solutions will be created in banking & payments, cybersecurity, supply chain, insurance, Tech & IoT, transportation, legal, and real estate.
Besides the corporate world, many governments and state-related institutions are also implementing blockchain. Major central bankers are also pondering blockchain-based digital currencies, known as CBDCs (central bank digital currency). The European Central Bank, along with the Bank of England and central banks from Japan, Switzerland, Sweden, created in January a think tank to test and potentially implement CBDC.
China has already trialed a digital yuan, though it doesn’t rely on a blockchain infrastructure. Nevertheless, Beijing has praised the technology.
All in all, the blockchain space comes with many opportunities for investors, as the trend will remain highly attractive.
