Global equity markets struggled to accumulate meaningful upside momentum despite what has been positive Covid vaccine news from Pfizer and Moderna. The former formally filed its vaccine for emergency use authorization with the FDA. Simultaneously, coronavirus cases in the US climbed, hitting new records alongside hospitalization rates.
On Wall Street[1], the tech-heavy Nasdaq[2] Composite outperformed, but gains were very modest this past week. The US Dollar[3] lost ground to most major currencies as longer-dated Treasury yields declined. The latter speaks to fading confidence in the medium-term growth outlook. Crude oil prices[4] outperformed on rising bets that OPEC+ will delay raising output in 2021.
Investors were also thrown off guard by a squabble between the Treasury and Federal Reserve over unused funds from emergency lending facilities established from the CARES Act. The former wants the latter to return some of them back to the department. Treasury Secretary Steven Mnuchin wants these redirected. This is as Congress struggles to pass another fiscal package amid gridlock.
Meanwhile, the British Pound[5] cautiously rose as the EU and UK seemed to inch closer to a Brexit deal. Reports crossed the wires that an agreement could perhaps be reached within 2 weeks. Ahead, investors are eyeing FOMC[6] minutes with expectations for more asset purchases brewing before December’s monetary policy announcement.
ECB minutes are also on tap for the Euro[7], as well as German and Euro-Area consumer confidence. The US will release Conference Board Consumer Confidence, which may decline given the recent surge in Covid cases. Expect lower-than-usual liquidity conditions with US markets offline on Thursday for the Thanksgiving holiday. What else is in store for markets ahead?
