Dow Futures Gain After Trump U-Turn on COVID Spending Bill: Europe Begins Vaccine Rollout

The Monday Market Minute

  • Global stocks extend gains as President Trump signs $2.3 trillion spending bill that includes nearly a trillion in COIVD relief.
  • Trump, who only last week called the bill ‘a disgrace’ changed course late Sunday.
  • Europe begins its rollout of the coronavirus vaccine following approvals for Pfizer/BioNTech and Moderna as fresh lockdown orders grip the United Kingdom.
  • U.S. equity futures suggest a firmer open on Wall Street heading into a holiday-shortened week, with Congress set to vote later today on an increase to the $600 coronavirus relief payments.

U.S. equity futures traded higher Monday, while the dollar slumped to fresh two-and-a-half-year lows, as markets reacted President Donald Trump’s decision to sign a $2.3 trillion spending bill that includes nearly a trillion dollars in coronavirus relief.

Following days of threats to send the bill back to Congress, Trump relented late Sunday and signed the spending package agreement he had earlier called a ‘disgrace’, opening up $600 in direct payments to most American families as well as improved unemployment benefits.

Congressional lawmakers will meet today to vote on an increase in the direct payment, hoping to raise it to $2,000, but are likely to find support from their Republican rivals in the Senate, many of whom have publicly rebuffed the outgoing President’s overtures. 

Trump climbdown looks set to provide a late-year boost to U.S. stocks, with futures contracts tied to the Dow Jones Industrial Average suggesting a 215 point opening bell gain and those linked to the S&P 500, which is up 5.82% for the year, priced for a 30 point boost. Nasdaq Composite futures, meanwhile, are indicating a 94 point opening bell gain to add to the tech-focused benchmark’s 45.55% year-to-date gain.

The added spending pledge, as well as the broader risk market optimism fueled by a Christmas Eve breakthrough on Brexit between London and Brussels kept the U.S. dollar under pressure, with the greenback falling to a fresh two-and-a-half year low of 90.06 against its global currency peers in overnight trading.

In Europe, last week’s Brexit trade agreement, however thin, provided an early boost to stocks on their first day of trading after the holidays, with the Stoxx 600 rising 0.6% in Frankfurt. Britain’s FTSE 100, meanwhile, remained closed for the trading Boxing Day celebrations.

Overnight in Asia, China’s decision to launch an antitrust probe into internet giant Alibaba Group Holding Ltd. BABA kept tech shares in its domestic market under pressure and held down gains for the region-wide MSCI ex-Japan index, which was marked 0.05% higher heading into the final hours of trading. Japan’s Nikkei 225, however, gained 0.74% to close at 26,845.03 points.

Global oil prices gained in concert with the U.S. dollar’s declines, as U.S. crude approaches the $50 per barrel mark, with traders also citing the roll-out of vaccines in Europe as another bullish indicator for energy demand in the first half of next year.

WTI contracts for February delivery were marked 48 cents higher at $48.71 each while Brent contracts for the same month, the global benchmark, were seen 43 cents higher at $51.72 each.