Daily summary: US stocks reverse gains amid stimulus uncertainties

• Poland and Hungary have provisionally accepted a EU budget proposal
• Dow Jones and S&P pull back from record highs
• Surge in US oil inventories

European indices finished today's session mostly higher, as investors welcomed news from Reuters that Poland and Hungary have provisionally accepted a European Union budget proposal from the bloc's German presidency and are now awaiting further approval from other member states, ahead of a highly anticipated EU summit on Thursday. Tomorrow market attention will focus on ECB policy meeting, as policymakers are expected to announce fresh round of monetary stimulus. On the Brexit front, UK Prime Minister Boris Johnson is scheduled to head over to Brussels later today and meet with European Commission president, Ursula von der Leyen, at 1900 GMT. On the coronavirus front, Germany reported 590 fatalities today, the highest daily increase since the pandemic began despite the fact the country had been under a partial lockdown since November. State of Saxony will close all non-essential shops from next week. Elsewhere, UK reported 599 new deaths yesterday, and France and Italy reporting 831 and 634 fatalities, respectively. DAX 30 rose 0.5%, CAC40 fell 0.2% and FTSE 100 finished 0.3% higher.

 

US stocks are trading lower as investors digested optimism around COVID-19 vaccine developments and the prospect of additional fiscal stimulus in the US. The Dow Jones fell 0.09%, S&P 500 slipped 0.2% and Nasdaq pulled back by 0.6%. FDA announced  Pfizer/BioNTech Covid-19 vaccine “met the prescribed success criteria” clearing it for emergency use approval. Meanwhile number of new infections in the US surpassed 209k yesterday, the fourth highest on record. Treasury Secretary Steven Mnuchin presented a $916 billion coronavirus relief proposal, in another effort to reach a deal however Democrats rejected the offer as it included only $ 40 billion in unemployment benefits, an amount that Democratic leaders found to be far too low. Dow Jones and S&P500 gave back their gains after Senate Majority Leader Mitch McConnell told Politico that Republicans and Democrats were “still looking for a way forward” on additional fiscal aid.

US crude futures are trading 0.2% lower at $ 45.57 a barrel, while Brent contract fell more than 0.6% to $ 48.81 in volatile session after EIA report showed a surprise increase in US crude inventories of 15.189 million barrels in the previous week, which was the largest increase since a record seen in April. Elsewhere, gold futures fell more than 1.6% to $ 1,840.71 / oz, while silver dropped over 2.2% to $ 24.00/oz.

Silver – price bounced off the major resistance at $25.00/oz which also coincides with the downward trendline and 50 SMA (green line). If the current sentiment prevails, the downward move could be extended to the $22.15/oz level. Source: xStation5

The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.