AAll of the benchmark US stock indexes managed to advance, but at a lower volume. The S&P 500 added + 0.4% but volume was below its 10-day average. The outperformers were the Nasdaq 100 (+ 0.8%) and the Russell 2000 (+ 0.8%) while the Dow Jones Industrial managed to post a meager gain of 0.2%.
The current key general theme for the markets was a “ tug of war ” between optimism for the developments of the Covid-19 vaccine and the actual rise in cases infected with the coronavirus in the United States and Europe. On a positive front, data from a Phase 2 vaccine trial from the AstraZeneca / Oxford collaboration showed encouraging immune responses in older patients.
The main US sectors of the S&P were energy (+ 1.5%) and information technology (0.8%). Interestingly, semiconductors and hardware, one of the industries in the IT sector, continued to post stellar gains (+ 1.3%), while the Philadelphia Semiconductor Index (PHLX) rose + 1.6%, to just 1.3% of its current total. maximum of 2,604, printed November 9.
On the American political front, the leader of the Democratic minority in the Senate and the leader of the Republican majority have agreed to resume fiscal stimulus talks. The news has not been so positive that Treasury Secretary Mnuchin has said he will not extend several Federal Reserve emergency lending programs adopted during the pandemic: business credit, municipal loans and Main Street loans would not be renewed when these programs expire on December 31. Overall, such actions may hamper the ability of the new Biden administration to garner economic support from the Fed to tackle the ongoing pandemic.
The US dollar continued to wobble against major currencies as the USD dollar index, which closed yesterday’s session at 92.29 in the US, moved dangerously close to major upside support at 92, 15 in place since the April 2011 low. In addition, the 10-year US Treasury yield spreads with German Bunds, UK Gilts and Japanese government bonds continued to tighten, which is not helping either. plus a near-term rally in the USD.
It was a mixed bag for the benchmark Asian stock indices: Japan’s Nikkei 225 (-0.7%), South Korea’s KOSPI (+ 0.01%), Hong Kong’s Hang Seng index (+ 0.4%), the Hang Seng Tech Index (+ 1.2%), China’s CSI 300 (+ 0.1%), Australia’s ASX 200 (+ 0.1%) and Singapore Straits Times Index (0.9%).
Chart of the day: PHLX Semiconductor ETF (SOXX)
The PHLX Semiconductor ETF (SOXX) is about to hit a potential new record.
Source: CMC Markets