S&P 500 Index May Extend Slide Lower Despite Senate Passing Aid Bill
S&P 500 Index, Coronavirus Relief-package, Us Hospitalizations, End Of Year Flows – Talking Points:
- Equity markets fell during APAC trade as a new strain of COVID-19 in the UK notably weighed on market sentiment.
- Risk assets may continue to come under pressure in the near term despite the Senate passing a much-needed fiscal aid package.
- S&P 500 index at risk of further losses after sliding back below key support.
Asia-Pacific Recap
Equity markets fell during Asia-Pacific trade as investors mulled coronavirus developments and a flurry of lockdowns and travel restrictions.
Australia’s ASX 200 index dropped 1.05% despite an unexpected rise in retail sales, as New South Wales recorded an additional 8 cases of COVID-19, bringing the state’s total to 90. Japan’s Nikkei 225 and Hong Kong’s Hang Seng indices also plunged over 1%.
In FX markets, the haven-associated US Dollar and Japanese Yen continued to outperform their major counterparts, while the cyclically-sensitive Australian and New Zealand Dollars lost ground. Gold and silver slid lower as yields on US 10-year Treasuries dipped 2 basis points to 0.92%.
Looking ahead, third-quarter GDP figures out of the US headline the economic docket alongside consumer confidence figures for December.
Market reaction chart created using Tradingview
Senate Passing Aid Bill May Fail To Buoy S&P 500
The benchmark S&P 500 index fell just shy of 2% lower overnight before recovering lost ground late in the Wall Street session, as the implementation of fresh travel restrictions – in response to a new, more infectious strain of COVID-19 in the UK – undermined market sentiment.
The index may extend its slide lower in the near term despite news that the Senate has passed a much-needed coronavirus relief package, as local health outcomes also continue to deteriorate.
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But it's going up.