Morning Minutes 12/4/2020

Morning Minutes

Markets Climb With OPEC+ Deal and Employment Reports in Focus

December 4, 2020

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Market Commentary By:
Colin Cieszynski, CFA, CMT
Chief Market Strategist
ccieszynski@siawm.com
+1 (647) 282-4428

Stock markets around the world are climbing toward the weekend amid a flurry of corporate and economic announcements. US index futures are shrugging off yesterday’s late-day pullback and mixed close to post gains of 0.2% to 0.4%. Overseas trading was mixed with the Nikkei slipping 0.2%, the Dax flat, and the FTSE rising 0.7%.

A number of developments surrounding coronavirus continue to swirl today and may continue to impact trading through the day. US politicians are ramping up fiscal stimulus talks again today looking to extend support programs before they expire and to agree on spending ahead of next Friday’s deadline to avert a government shutdown. Meanwhile, California announced new regional lockdowns yesterday and Pfizer announced it will only be able to ship 50 million doses of its COVID vaccine instead of 100 million doses because of supply chain / raw material hiccups. While there is less than a month left in 2020 and Pfizer is still awaiting approval in most countries anyway, this news does remind investors that the road to recovery may be filled with hidden potholes.

The renewed localized lockdowns and perhaps concern that wider lockdowns could be coming appear to be starting to take their toll on the US economy. Nonfarm payrolls increased by only 245K last month short of the 469K street estimate and down from last month’s 610K. In contrast, employment growth in Canada remained surprisingly strong (62K vs street 20K and previous 83K).

Crude oil prices are on the rise this morning with WTI up 0.6% and Brent up 0.8%. OPEC+ producers were able to find common ground and hammer out a production agreement which will see an increase of 0.5 mmbbl/d, which is in the lower half of the range between the 2.0 mmbbl/d increase which had previously been scheduled for January, and the continued freeze that some had been calling for.

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