U.S. Stock Futures Waver in Final Trading Day of 2020
December 31 2020 - 8:06AM
Dow Jones News
By Caitlin Ostroff
U.S. stock futures wobbled Thursday, signaling a muted finish to
a year that saw the major indexes contract sharply in the spring
before snapping back to cinch record highs.
Futures tied to the S&P 500 and contracts linked to the Dow
Jones Industrial Average wavered between gains and losses,
indicating that gauges may take a breather in the final day of
trading for 2020. Nasdaq-100 index futures ticked up 0.1%. Trading
volumes have eased this week with many people taking year-end
holidays.
The tepid end belies a year that saw stocks bounce back since
the March rout despite the economic fallout of the coronavirus
pandemic. The unprecedented steps taken by major central banks to
bolster credit flow and the increase in governments' spending
encouraged investors to focus on growth opportunities despite the
economic havoc.
That helped the three major indexes notch 100 record closes so
far in 2020, with the Dow hitting its 13th all time finishing high
of the year on Wednesday.
"When you look at the entire year, you could say policy makers
drowned the black swan," said Carsten Brzeski, global head of macro
research at ING Groep.
The sharp rally in recent weeks reflects investors' optimism
about the prospects for next year, he added. "There is a hope we
will see this synchronized global recovery in 2021."
Money managers are hoping that the widespread rollout of
vaccines will allow for the resumption of normal social and
business activity, helping accelerate the economic rebound next
year. Central banks and governments are also widely expected to
continue providing additional support to the economy.
"The market believes, next year, that everything is going to be
good," said James Athey, investment manager at Aberdeen Standard
Investments. Investors are betting that "equity markets cannot go
down because they are underwritten by better growth, more fiscal
and more monetary policy. Today's price already includes the good
news of tomorrow."
Trading on Thursday is also likely to be particularly muted as
money managers hold off on making any big changes to portfolios
ahead of the new year. U.S. and European markets will be closed
Friday for New Year's Day.
Some of the biggest concerns of the year -- such as hopes for
Covid-19 vaccines, uncertainty around the November presidential
elections, deteriorating U.S.-China trade relations, and the
outcome of the U.K.'s negotiations with the European Union for a
new trade deal -- have abated in recent weeks, investors said.
"Everything has settled now," said Mr. Brzeski. "For market
participants, this is the moment to relax and recover."
In offhours trading, shares of Enphase Energy rose 1.7% after
S&P Dow Jones Indices said that the company will replace
Tiffany in the S&P 500 index from Jan. 7. Tiffany is being
acquired by LVMH Moet Hennessy-Louis Vuitton.
In bond markets, the yield on the 10-year Treasury note was
little changed at 0.925%, compared with 0.926% Wednesday.
Data on how many Americans applied for unemployment benefits for
the first time through the week ended Dec. 26 are due at 8:30 a.m.
ET. Economists surveyed by The Wall Street Journal are expecting
weekly jobless claims to have edged higher, as a surge of
coronavirus cases across the U.S. has prompted some states to
impose new restrictions on businesses.
Overseas, the pan-continental Stoxx Europe 600 declined less
than 0.2%. The U.K.'s FTSE 100 Index fell 1.3% after the British
government announced tougher restrictions across England due to
heightened Covid-19 infections.
In Asia, China's Shanghai Composite gained 1.7% by the close of
trading, while Hong Kong's Hang Seng ticked up 0.3%.
Write to Caitlin Ostroff at caitlin.ostroff@wsj.com
(END) Dow Jones Newswires
December 31, 2020 07:51 ET (12:51 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
FTSE 100
Index Chart
From Mar 2024 to Apr 2024
FTSE 100
Index Chart
From Apr 2023 to Apr 2024