The Market Is Set For A Calm Trading Session At The End Of The Turbulent Year
S&P 500 futures are swinging between gains and losses ahead of the final trading session of the year. Typically, the trading volume is light in the last session of the year so traders should not expect big moves from the market.
The U.S. stimulus story will remain the key thing to watch at the beginning of 2021. The Senate Majority Leader Mitch McConnell blocked a fast vote on $2,000 stimulus checks as he pushed for the bill which also included measures favored by Republicans. Nevertheless, the market remains confident that the economy will get additional support in early 2021 so stocks are trading near record highs.
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Coronavirus will also remain a major driver, although markets have successfully ignored all the bad news on this front in recent months. The new, more infectious strain of the virus which emerged in the UK is now being found in various countries of the world. At this point, additional problems with coronavirus present the main risk for the current market rally.Advertisement
Oil Remains Stuck Near The $48 Level While Traders Wait For OPEC+ Meeting
OPEC+ members will meet on January 4 to evaluate the current state of the market and discuss their plans for the future.
Inventories remain at high levels but OPEC+ countries are waiting for the opportunity to increase production in order to support their economies which were hit hard by the pandemic.
The $50 level is within reach but oil may need additional catalysts in order to get above this level. Meanwhile, oil-related stocks have stabilized after the recent correction and look ready for another upside move in case WTI oil gets above $50. Most likely, traders will have to wait for any serious moves in the oil market until the beginning of 2021.
Gold Is Trying To Settle Above The $1900 Level
This rebound may be set to continue as interest rates will remain at the bottom for the next few years while the world governments will continue to print money at a fast pace.
Mining stocks have mostly lagged the recent recovery of the precious metals market, but they may be ready for a material upside move in case gold manages to settle back above the $1900 level which will increase traders’ interest.