January 23, 2021

Market and Financial News Aggregator

U.S. Stocks May Lack Direction Following Recent Strength

3 min read

Stocks may turn in a lackluster performance in early trading on Monday following the strong upward move seen last week. The major index futures are currently pointing to a mixed open for the markets, with the Dow futures down by 158 points and the Nasdaq futures up by 19 points.

Traders may be reluctant to make significant moves amid uncertainty about the near-term outlook for the markets following the recent climb to record highs.

Some negative sentiment may be generated in a reaction to a report from Reuters indicating the Trump administration is poised to add China’s top chipmaker SMIC and national offshore oil and gas producer CNOOC to a blacklist of alleged Chinese military companies.

Reuters said a recent executive order issued by President Donald Trump would prevent U.S. investors from buying securities of the listed firms starting late next year.

Nonetheless, more upbeat news regarding a potential coronavirus vaccine is likely to keep any selling pressure relatively subdued.

Moderna (MRNA) announced that a phase 3 trial of its vaccine candidate indicates an efficacy of 94.1 percent.

The biotechnology company said it plans to request an Emergency Use Authorization from the FDA and conditional approval from the European Medicines Agency today.

Just after the start of trading, MNI Indicators is scheduled to release its report on Chicago-area business activity in the month of November. The Chicago business barometer is expected to dip to 59.2 in November from 61.1 in October, but a reading above 50 would still indicate growth.

The National Association of Realtors is also due to release its report on pending home sales in the month of October. Pending home sales are expected to jump by 1.0 percent in October after slumping by 2.2 percent in September.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

While trading activity was somewhat subdued following the Thanksgiving Day holiday, stocks moved mostly higher during an abbreviated session on Friday. With the upward move, the Nasdaq and S&P 500 reached new record closing highs.

The major averages all closed in positive territory, although the tech-heavy Nasdaq outperformed its counterparts. The Nasdaq jumped 111.44 points or 0.9 percent to 12,205.85, while the Dow edged up 37.90 points or 0.1 percent to 29,910.37 and the S&P 500 rose 8.70 points or 0.2 percent to 3,638.35.

For the week, the Nasdaq soared by 3 percent, while the Dow and the S&P 500 surged up by 2.2 percent and 2.3 percent, respectively.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan’s Nikkei 225 Index slid by 0.8 percent, while China’s Shanghai Composite Index fell by 0.5 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the German DAX Index has risen by 0.6 percent, the U.K.’s FTSE 100 Index is down by 0.1 percent and the French CAC 40 Index is down by 0.2 percent.

In commodities trading, crude oil futures are slipping $0.32 to $45.21 a barrel after edging down $0.18 to $45.54 a barrel last Friday. Meanwhile, after plunging $23.10 to $1,788.10 an ounce in the previous session, gold futures are slumping $16.60 to $1,771.50 an ounce.

On the currency front, the U.S. dollar is trading at 104.14 yen versus the 104.09 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.1986 compared to last Friday’s $1.1963.

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2020-11-30 08:44:07


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