Equities Mixed but Tech Continued Its 2020 Climb…..
U.S. stocks closed mixed, as the broad-based indices fell off from early session highs that had them back to near record territory, whereas the Technology sector continued its climb higher. Much of the early strength was driven by COVID-19 vaccine optimism as the U.S. followed the U.K. by administering the first doses of the vaccine that was developed by Pfizer and BioNTech and received FDA Emergency Use Authorization over the weekend. Moreover, hope for a fiscal relief package also was an early contributor, as a nearly $900 billion bill is expected to be unveiled by a group of bipartisan lawmakers. However, lingering concerns regarding the rise in viral infections and further lockdowns, kept much of the enthusiasm in check. The economic calendar was void of any major U.S. releases today, but is set to garner attention as the week wears on, with monetary policy decisions out of the U.S., the U.K. and Japan. M&A news poured in, headlined by Astrazenca’s agreement to acquire Alexion Pharmaceuticals in a transaction valued at $39.0 billion. Treasuries were mostly little changed, while the U.S. dollar resumed a recent tumble as the British pound rallied noticeably amid some Brexit trade deal optimism. Gold saw some pressure and crude oil prices finished higher. Asia and Europe closed mixed.
The Dow Jones Industrial Average fell 185 points (0.6%) to 29,862, the S&P 500 Index was down 16 points (0.4%) at 3,647, while the Nasdaq Composite advanced 62 points (0.5%) to 12,440. In heavy volume, 1.0 billion shares were traded on the NYSE and 4.4 billion shares changed hands on the Nasdaq. WTI crude oil was $0.42 higher at $46.99 per barrel and wholesale gasoline added $0.01 to $1.32 per gallon. Elsewhere, the Bloomberg gold spot price fell $10.88 to $1,828.98 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—decreased 0.3% to 90.69.
Moreover U.S. fiscal relief optimism resurfaced as a bipartisan group of lawmakers is set to unveil a roughly $900 billion pandemic relief bill today. However, there is no guarantee that an agreement will be made as it has been elusive for several months even as some emergency benefits have expired, a plethora of small businesses have been shut down and unemployment has remained painfully elevated.
Finally, the markets are eyeing the political developments in Georgia, which is set to hold runoff Senate elections in early January that will determine the composition of Congress amid President-elect Joe Biden’s administration as discussed in our podcast, Georgia’s Runoff Carries Outsized Impact.
Treasuries were little changed, with the yields on the 2-year and 10-year notes flat at 0.12% and 0.90%, respectively, while the yield the 30-year bond rate ticked 1 basis point higher to 1.63%.
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