Market Recap
US Markets:
Stocks ended the day somewhat higher as traders rotated back into tech names amid a rising number of coronavirus cases.
The Dow gained 43 points, or 0.2% after falling by as much 200 points earlier in the session. The S&P 500 climbed 0.4% and the Nasdaq led the way higher 0.9%. It was the first gain for the major indices in three sessions.
Despite the ominous COVID data, reinstated shutdowns, and CDC advisory to avoid Thanksgiving travel, some optimism led the markets higher in the end today. Oxford University and Astrazaneca’s vaccine candidate showed encouraging results, and Senate Minority Leader Chuck Schumer said Majority Leader Mitch McConnell had agreed to resume negotiations on a new fiscal stimulus package.
Cryptocurrency:
What a run Bitcoin continues to be on. Bitcoin continued its charge towards $20,000 again and continued its rally. After hovering around $18,480 yesterday, before sharply plunging 6% before leveling off around $17,800, Bitcoin creeped back towards $18,000 today. The $18,500 level has been shown to be a key near-term resistance area before the crypto reaches $20,000, however, there are many Bitcoin believers. Bitcoin’s value has more than doubled this year, and has not traded this high since early-January 2018. In fact, Bitcoin has rallied 75% in less than three months, and gained almost 400% since March. 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. Litecoin also surged by nearly 9% today as well.
Overall Market:
European stocks closed in the red again due to COVID fears. The DAX 30 fell 0.7% to 13,107 as Germany reported 22.6 thousand new cases- one of the largest daily increases since the start of the pandemic. European leaders are also meeting in Brussels and are expected to demand an emergency no-deal plan from the European Commission if a deal with the UK is not struck by tomorrow. UK factory orders also fell faster in November than expected as intensified lockdowns are causing manufacturers to continue trimming expectations. Canada’s TSX closed flat and Brazil’s Ibovespa index traded higher on Thursday and rebounded from the previous session’s losses.
The US dollar strengthened for the first time in six sessions breaking the 92.70 level. As lockdowns mount and jobless claims disappoint, the dollar is regaining some steam as a safe haven asset. However, the dollar is still firmly in decline, and is approaching a 30 RSI level- an indicator that it is oversold. It is also trading below both its 200-day and 50-day moving average. There is also further speculation on stimulus and monetary easing which could raise the level of US debt and weaken the dollar further. The Philadelphia Fed Manufacturing Index in the US also fell to 26.3 in November 2020 from 32.3 in October which was the highest since February, before the COVID crisis. Oil prices were also under pressure again due to demand concerns, and hovered below $42 a barrel.
WHATS UP
Tech led the way today as investors charged back into high flying names. Netflix and Amazon gained 0.6% and 0.4%, respectively. Alphabet rose 1% and Microsoft closed higher by 0.6%. Apple also rose 0.5% and Facebook rose 0.4%.
Tesla also reached an all-time intraday high today, at $508.61 a share. The stock has skyrocketed this year, and has been on a furious rally ever since the announcement that it would be included in the S&P 500 index starting December 21.
Despite the declines over the last few sessions, in the broader context, they are miniscule compared to how stocks have rallied this month amid clarity following the U.S. election and the positive news on potential coronavirus vaccines. The S&P 500 has gained more than 9% in November along with the Nasdaq, while the Dow has popped 11.3% in that time. The small-cap Russell 2000 has outperformed everyone this month, however, surging more than 15%.
Source: CNBC, TradingEconomics, Stockcharts, Yahoo! Finance
