Brexit Fears Put Pressure On Stocks
S&P 500 futures are losing ground in premarket trading amid indications that Brexit negotiations are going in the wrong direction. UK Prime Minister Boris Johnson has recently stated that a no-deal Brexit was a strong possibility.
Meanwhile, the President of the European Commission Ursula von der Leyen stated that the probability of a no-deal scenario was higher than the probability of a compromise deal.Advertisement
These comments pushed European markets deep into the red zone and put significant pressure on S&P 500 futures. The Brexit-sensitive GBP/USD dived below 1.3200 and is currently heading towards 1.3100.
A no-deal Brexit could send powerful shockwaves across markets so it’s not surprising that disappointing news are pushing stocks to lower levels. That said, Brexit negotiators have time until Sunday to reach a compromise deal.Advertisement
U.S. Stimulus Negotiations May Have To Be Extended After Christmas
U.S. House Speaker Nancy Pelosi has recently indicated that U.S. lawmakers may have to meet after Christmas to continue negotiations if the compromise deal is not reached before the holiday.
Yesterday, Initial Jobless Claims report showed that 853,000 Americans filed for unemployment benefits in a week. The job market has started to feel pressure from the second wave of the virus, and the economy clearly needs another round of stimulus.
While Democrats and Republicans look ready to reach a compromise deal, they have different views about the details of the new stimulus package. Another delay of much-needed economic support may put material pressure on stocks.
FDA Will Soon Grant Emergency Use Authorization For Pfizer/BioNTech Vaccine
Pfizer and BioNTech shares are gaining some ground in premarket trading, but the news does not provide support to the broader market which is focused on Brexit and stimulus.
It remains to be seen whether vaccine optimism will be able to boost stocks in the upcoming trading sessions amid worries about Brexit and U.S. stimulus.