Dow record close | Senate stimulus talks stall | Oxford vaccine approved in U.K.

31/12/2020 Stocks are poised to end 2020 at record highs as most Asian equities gained in curtailed trading on the last day of the year. The dollar traded at its lowest in 2 ½ years. Chinese stocks outperformed, with the benchmark CSI 300 Index at a five-year high as the country gave the green light to its first coronavirus vaccine for general public use, and data showed a steady economic recovery. Stocks also climbed in Hong Kong and fell in Sydney. Markets in Japan and South Korea are shut. S&P 500 Index futures fluctuated after U.S. stocks climbed earlier, with small-cap shares outperforming. Volumes were light during the holiday week, with trading in S&P 500 shares about 25% below the 30-day average. Bitcoin extended its record- breaking rally to surpass $29,000.. Tencent trading up 0.80% in HK. The JSE Top 40 futures are indicating a flat start to the last trading day of 2020. The local market will close at 12pm today.

Locally the FTSE/JSE Africa All-Share Index closed up 0.66% to 59,634 on very thin volume, mostly supported by a further rebound in Naspers and Prosus, tracking a 6% gain in Tencent, The Rand gained about 0.4% to 14.64 levels per US$, with the Yield on 10-year govt rand bonds steady at 8.86 bps.
EU/UK
European stocks closed slightly lower on Wednesday after U.K. lawmakers approved a Brexit trade deal and investors reacted to further positive Covid vaccine developments. The pan-European Stoxx 600 index ended down 0.34%, with most sectors and major bourses in negative territory. London’s FTSE 100 index was down 0.7% despite the coronavirus vaccine developed by the University of Oxford and AstraZeneca being authorized for emergency use in the U.K. The German Dax slipped 0.31%, with France’s CAC down 0.22%. The announcement marks another step in the global battle against the pandemic and will allow the U.K. to greatly expand its Covid-19 immunization program started in December. So far, the Pfizer-BioNTech vaccine has been given to 600,000 people in the U.K., according to government statistics. Shares of AstraZeneca closed slightly lower on Wednesday.
US
Stocks rose slightly on Wednesday amid renewed vaccine optimism while traders looked for clues on additional fiscal stimulus. The Dow Jones Industrial Average gained 73.89 points, or 0.2%, to 30,409.56. The 30-stock average eked out a record closing high. The S&P 500 climbed 0.1% to 3,732.04, and the Nasdaq Composite advanced 0.2% to close at 12,870. Wednesday marked the fourth positive session in five for both the Dow and S&P 500. Disney rose more than 2% to lead the Dow higher. Energy and materials were the best-performing sectors in the S&P 500, jumping more than 1% each. Wednesday’s move higher came after a British regulator approved a coronavirus vaccine developed by the University of Oxford and AstraZeneca for emergency use. The approval followed the discovery of a new Covid strain in the U.K., which has also been confirmed in the U.S. AstraZeneca shares climbed 0.6%. Wall Street also weighed the prospects of greater coronavirus relief as lawmakers continued to disagree over direct payments to Americans.
ASIA
China on Thursday said its factory activity expanded in December. The country’s official manufacturing Purchasing Managers’ Index (PMI) for December came in at 51.9, according to data from the National Bureau of Statistics. Analysts had expected the December figure to come in at 52, according to Reuters. That was a slight decline compared to November’s reading of 52.1. Still, the December figure was above the 50-level that separates expansion from contraction. China and the European Union also agreed on Wednesday to an investment deal that will give firms in Europe greater access to Chinese markets, Reuters reported. In Australia, the S&P/ASX 200 slipped 1.43% to 6,587.10. Singapore’s Straits Times index also dipped 0.89% to 2,843.81. MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.1%. Markets in Australia, Singapore and Hong Kong closed earlier than usual on Thursday due to New Year’s Eve. Markets in Japan and South Korea are closed on Thursday for a holiday.
COMMODITIES
Oil headed toward the end of a tumultuous year on a positive note after a bigger-than-expected drop in U.S. crude inventories added to evidence the energy demand recovery remains largely intact. Futures in New York were steady near $48 a barrel after rising 0.8% Wednesday.
Gold is poised to cap the biggest annual advance in a decade after a tumultuous year, with gains this month aided by the dollar’s decline to the lowest level since April 2018. Bullion for immediate delivery was 0.3% lower at $1,888. an ounce. That’s up 6.3% this month, and 24.5% higher over 2020, poised for the biggest full-year advance since 2010. Spot silver traded at $26.38 an ounce, up 48% this year. Palladium is on course for a fifth consecutive annual gain, with a rise of more than 20% in 2020. Platinum has climbed 10%.
Copper is poised to top a sweep of annual gains for base metals, with investors looking beyond 2020’s Covid-19 disruptions to looming supply shortfalls. All six base metals on the London Metal Exchange are set close the year higher. But copper’s extended, V-shaped move during this tumultuous year stands out, with the metal up nearly 70% from its closing low in March. LME copper dipped 0.2% on the final day of the year, to trade at $7,833 a ton by 10:30 a.m. Shanghai time. That’s down from a close at a near eight-year high earlier in December at $7,985. Nickel gained 0.3% to $16,815 a ton, while zinc declined 0.2%.
Iron ore is set to take the crown as the hottest major commodity of 2020, and yet uncertainties over the outlook for Chinese demand and signs of rising supply are spurring concerns heading into the new year. Futures are on course for a 73% gain in Singapore this year, fueled by a 26% rally in December. Most-active futures retreated as much as 0.8% to $156.60 a ton in Singapore, before trading little changed at $158.30 at 1:02 p.m. local time. Prices are headed for the first back-to- back weekly loss since October.