Market Recap
US Markets:
Vaccine-related euphoria appeared to wear off as U.S. stocks fell for a second straight day.
The Dow Jones dropped 345 points in a volatile session, after rising by as much as 147 points at its session high. The S&P 500 fell 1.2%, while the Nasdaq fell 0.8%. The indices sharply sold-off towards the end of the trading day after New York City Mayor Bill de Blasio announced that the city’s public schools would shut down and move to remote learning as COVID surges to levels not seen since the initial peak. The indices finished the day near their session lows.
The U.S. is grappling with rising COVID infections and is recording an average of 157,000 new coronavirus cases per day. The outlook for the winter is ominous as these new infections are nearly 30% higher than infection levels a week ago.
The market’s two-day decline came after the Dow and the S&P 500 both hit new record closing highs on Monday following positive vaccine news from Moderna. Stocks as a whole are still having a strong month with the Dow up more than 12% and the S&P 500 up more than 10% in November. Despite investors rotating out of tech stocks, the Nasdaq is still up more than 9%.
Cryptocurrency:
Bitcoin continued its charge towards $20,000 today. The world’s leading cryptocurrency skyrocketed around another $1000 to around $18,480, before sharply plunging 6% during Asian trading hours, before leveling off around the $17,800 level. $18,500 can be seen as a key near-term resistance area before the crypto reaches $20,000. Bitcoin’s value has more than doubled this year, and has not traded this high since early-January 2018. Since the beginning of the year. With coronavirus stimulus measures, validation from public companies such as Square and Paypal, and interest from major investors, the case for Bitcoin has arguably never been this bullish before. Many believe Bitcoin could reach $20,000 before year’s end as many expect the cryptocurrency to consolidate. Billionaire investor Mike Novogratz also predicted that the price of bitcoin would hit $65,000 eventually. Other cryptocurrencies did not move much today, outside of XRP which declined nearly 4%.
Overall Market:
European markets closed mostly higher on Wednesday, with Frankfurt’s DAX 30 adding 70 points or 0.5% to 13,204. Several takeover deals in the region moved markets higher. Deutsche Boerse rose 2.9% after the German stock exchange operator said it would acquire an 80% stake in corporate governance adviser Institutional Shareholder Services, and Britain’s RSA Insurance also rose 4.2% after it said it had received a cash offer worth £7.2 billion from Canadian peer Intact Financial and Danish insurer. Ubisoft (+1.8%) and Micro Focus International (+31.2%) also led the way on positive corporate news, while disappointing earnings were reported by Schaeffler (-5.3%) and Maersk (-1%). The Eurozone consumer prices also dropped 0.3% from a year earlier in October 2020, matching the previous month’s decline, which was the steepest since April 2016. Canada’s TSX snapped its 3-Day winning streak despite trading modestly higher through much of Wednesday’s session. Canada’s annual inflation rate also surprisingly increased to 0.7% in October from 0.5% in September and above market expectations of 0.4% largely due to the higher cost of food.
Mortgage applications in the United States fell 0.3% in the week ended November 13th, following a 0.5% in the previous week according to data from the Mortgage Bankers Association. While applications to refinance a home loan fell 1.8%, homebuyer mortgage applications rose 3.5%. WTI crude futures also briefly cut some earlier gains, before rising over 1% to trade around $42.1 a barrel. This is back to approaching its over two-month high which it touched last week. This is despite a rise in US crude oil inventories.
WHATS UP
Stay-at-home stocks rebounded after New York City’s announcement of the shuttering of their schools. Zoom Video rallied more than 3%, while Peloton gained nearly 2%.
Big Tech lagged however as Apple, Microsoft, Alphabet and Facebook all fell at least 1%.
Lowe’s also slumped 6% after the home improvement retailer reported third-quarter earnings and a profit forecast that somewhat underwhelmed.
Boeing led the Dow and jumped as much as 4% after the FAA lifted its ban on Boeing’s 737 Max after a 20-month grounding following two fatal accidents.
Target shares also rose about 2% after its third quarter earnings topped estimates due to booming digital sales.
Source: CNBC, TradingEconomics, Yahoo! Finance
