Morning Minutes 12/11/2020

Morning Minutes

Markets Drift as Trade and Stimulus Talks Drag On

December 11. 2020

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Market Commentary By:
Colin Cieszynski, CFA, CMT
Chief Market Strategist
+1 (647) 282-4428

Friday finds stock markets around the world drifting downward with US index futures slipping 0.6%-0.7%, the Dax falling 1.4%, the FTSE retreating 0.7% and the Nikkei dipping 0.4%. The malaise has also spread to commodities where copper is down 1.1% while WTI and Brent Crude are flat to down 0.2%.

It appears to be a lack of news this morning that has been weighing on bourses today. Investors have been hoping for successful resolutions to stimulus/spending talks in the US and UK/EU trade talks in Europe, plus FDA approval for Pfizer’s COVID vaccine in the US and nothing has happened so far. The British Pound is down 1.1% with trade talks dragging ahead of Sunday’s deadline and UK PM Johnson suggesting a growing possibility of the UK crashing out of the EU with no new trade deal on January 1st. In the US, the Senate still needs to pass a one-week stopgap spending measure to avoid a government shutdown after today, while the House is not set to sit again until Tuesday. The FDA meanwhile, indicated that a panel has recommended emergency use approval for Pfizer’s COVID vaccine and the agency is working away on a final decision but no approval has been given as of yet.

In corporate news, Disney is up 8.2% in premarket action after announcing overnight that Disney Plus+ subscribership has grown to 86.8 million, up 13 million over the last three months, plus a number of new shows in development for streaming in the Star Wars and Marvel franchises.  AirBNB is down 3.2% in premarket action after soaring in yesterday’s trading debut to $144.71, more than double the $68.00 IPO offering price.

Several companies beat the street on earnings overnight as well including Costco ($2.29 vs street $2.05), Lululemon ($1.16 vs street $0.88), Broadcom ($6.35 vs street $6.25) and Oracle ($1.06 vs street $1.00).

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