Dow Futures Gain As Trump Rattles Markets With COVID Relief Bill Criticism; Weekly Jobless Claims in Focus

The Wednesday Market Minute

  • Global stocks post modest gains in holiday-thinned trading even as President Donald Trump refuses to sign the long-delay COVID relief bill.
  • Trump called the $2.3 billion package, which includes $900 billion on COVID spending, a ‘disgrace’ and insists lawmakers boost the $600 support payment to $2,000.
  • House Democrats say they’re willing to re-work the deal, but Republican leaders in the Senate may be more reluctant.
  • Brexit negotiations continue ahead of the December 31 deadline amid contradictory headlines on progress between London and Brussels.
  • Health officials warn that the new COVID variant may have already arrived in the U.S., where cases are rising at a 200,000 daily pace and fatalities are nearing 325,000.
  • U.S. equity futures suggest a firmer open on Wall Street ahead of an early reading on weekly jobless claims and personal spending data at 8:30 am Eastern time.

U.S. equity futures edged higher Wednesday in holiday-thinned trading as bullish sentiment held steady even as President Donald Trump refused to sign a $2.3 billion spending bill that would provide nearly a trillion dollars worth of relief to struggling businesses and families around the country. 

Trump called the bill, agreed late Monday after months of bitter partisan negotiations, a “disgrace” in a video message posted through his verified Twitter account and insisted lawmakers increased the amount of direct COVID relief payments from $600 to at least $2,000. 

“I’m also asking Congress to immediately get rid of the wasteful and unnecessary items from this legislation, and to send me a suitable bill, or else the next administration will have to deliver a COVID relief package,” Trump said, before adding to his baseless theories that he won the November election by saying: “And maybe that administration will be me.”  

House Democrats offered to re-work the deal to boost the COIVD relief payments, but there was little indication that Republican Senators, who control the upper chamber, were willing to add to a spending level they were already uncomfortable with.

Trump’s intervention doesn’t kill the deal, however, given that it earned 92 votes in the Senate and 359 in the House, levels that would easily override any Presidential veto.

U.S. equity futures seemed to reflect that calculus in overnight trading, with contracts tied to the Dow Jones Industrial Average indicating an 80 point opening bell gain and those linked to the S&P 500 suggesting a 10 point bump to the upside, albeit in volumes that were much lower than an average trading day. 

Apple  (AAPL) – Get Report shares were the most active pre-market gainer, rising 0.6% to $132.65 each amid comments from Tesla  (TSLA) – Get Report founder Elon Muck, who claimed in a series of Tweets yesterday that he attempted to sell his clean-energy carmaker to the tech giant “during the darkest days of the Model 3 program” but that CEO Tim Cook refused to meet with him.  

Stocks were mixed in early European trading, with the Stoxx 600 rising 0.4% and Britain’s FTSE 100 slipping modestly into the red, as traders continued to navigate contradictory headlines on Brexit talks as the December 31 deadline for a comprehensive trade deal between London and Brussels looms ever-closer.

Britain, meanwhile, continues to struggle in its attempt to contain the spread of a new COVID variant, which has locked-down the city of London and will likely trigger similar restrictions around the country in the days that follow Christmas.

In the U.S., where cases are rising by around 200,000 each day, health officials worry the new strain of the virus may have already arrived, although scientists from both Pfizer  (PFE) – Get Report and Moderna  (MRNA) – Get Report, which have developed approved coronavirus vaccines, say their treatment will induce immune responses against the newly-identified variant. 

The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.3% lower in overnight trading at 90.382, near the lowest since April 2018, while benchmark 10-year Treasury note yields held at 0.92%.

The weaker dollar helped oil prices stand their ground in overnight dealing, as well, following data from the American Petroleum Institute that showed domestic crude stocks rose by 2.7 million barrels over the week ending December 18, compared to forecasts of a 3.2 million barrel decline.

WTI futures contracts for February deliver, which are tightly linked to U.S. gasoline prices, rose 6 cents to $47.08 per barrel while Brent contracts,  the global benchmark, edged 5 cents higher to $50.13 per barrel.

Overnight in Asia, regional stocks snapped a three-day losing streak with a 0.85% gain heading into the final hours of trading, with Japan’s Nikkei 225 rising 0.33% to close at 26,524.79 points.