Tech Stocks Cling to Gains, Dow Jones, S&P 500 Turn Negative
Covid-19 cases increase in the US while stricter lockdowns planned in Europe.
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- Covid-19 cases increase in the US
- Stricter lockdowns planned in Europe
The major US indexes struggled to record any significant move on Monday as market participants weighed the Covid-19 vaccine rollout across the US. Even though futures were showing a higher open by nearly 1%, the Dow Jones staged a 550-point U-turn, went negative by the end of the Monday session, and closed at 29,861.55, or a decline by 0.62%, or 184.82 points. The S&P 500 also closed in the red, down by 0.44%, or 15.97 points. The tech-heavy Nasdaq Composite closed in positive territory, up by 0.50%, or 62.17 points.
Key events to be unfolded into the week are currently determining the market sentiment. New York City mayor, Bill de Blasio warned on Monday that New York could follow California into a “full lockdown” as the coronavirus pandemic is still sweeping across the US and New York is quickly becoming another epicenter. For the last seven days, the state registered an average of 10,048 confirmed coronavirus cases or an increase of 72% compared to two weeks earlier. Since the pandemic began, New York has recorded a total of 780,831 positive Covid-19 cases and 35,198 Covid-19 deaths by December 14.
Amid the rising numbers, New York was the place where the first Covid-19 vaccine was administered. Sandra Lindsay, a nurse in Queens was the first of many to receive the vaccination as the vaccine rollout across the US began on Monday, nearly 300 days after the first confirmed coronavirus case in New York on March 1. Hospitals are now running out of beds quickly as the new cases on a 7-day average are higher than they were in the peak during the first wave in April. On a broader scale, the US is now closing in on 300,000 Covid-19 deaths and over 16.4 million positive cases. The latest data shows 183,814 new cases in the US on Sunday and an average of 210,039 cases per day over the last seven days, an increase of 30% from two weeks ago.
Given the grim situation, the US has two things to be optimistic about: the vaccine and the fiscal stimulus. As much as 20 million people around the US are expected to receive the vaccine by the end of December. Additionally, US lawmakers are discussing a new round of spending that could be approved even this week. What lifted US futures on Monday was the hope of a new $908B coronavirus relief package by a bipartisan group of Senate and House lawmakers.
The Pandemic Continues to Impact Life in Europe
Outside the US, London is switching from tier 2 to tier 3 on Wednesday due to a surge of positive cases. The third tier has the toughest coronavirus restrictions, which means that about 9 million Londoners will have no access to restaurants, bars, pubs, theatres, and other hospitality venues. People will also be banned from socializing in groups of more than 6 people outside or indoors with people of a different household or outside their “support bubble”.
Germany also announced a nationwide lockdown between Dec 16 and Jan 10. Schools and non-essential shops will be closed.
European indexes closed in positive territory, except the UK’s FTSE100 which closed down by 0.23%, or 14.92 points. The German DAX climbed 0.82%, or over 108 points while the French CAC40 closed higher by 0.37% or 20.29 points.