S&P 500 Index May Extend Slide Lower Despite Senate Passing Aid Bill

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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.

S&P 500 Index May Extend Slide Lower Despite Senate Passing Aid Bill

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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Stock Sanity 3 weeks ago Member's comment

But it's going up.