The upcoming market week is set to be a jam packed one;
i) First doses in the U.S. COVID-19 vaccine campaign are due to be administered on Monday as the pandemic rages across the country,
ii) Federal Reserve prepares to hold its final meeting of the year with regards to pandemic stimulus package which there remains a deadlocked with the Congress,
iii) Brexit talks are down to the wire and if no deal is reached by Thursday the Bank of England’s final meeting of 2020 will be a must watch event.
iv) Tesla is finally set to join the S&P 500 just before the market close on Friday,
Here’s what you need to know to start your week.
S&P 500 (US Market)
The S&P 500 ($SPX) wrapped up a losing week, as the outlook for additional fiscal stimulus remained uncertain.
The benchmark index declined -0.82% (-30.3 points), with an establishment of an all time high session at 3,715 level during the week. The minor sell off during the week has the volatility of the index at it’s 10 weeks low, with price volatility range at an average of +/- 50 points per daily market session.
As highlighted during the previous week, S&P 500 remains trading within a very tight 3% trend channel range established since 10th November. The closing of Friday’s session established $SPY a Bullish Reversal Hammer (highlighted), indicating a potential short term rally for the upcoming week.
The immediate support to watch is 3,588 classical support level, with SPY poised to recapture its all time high at 3,715 level this upcoming week.
Top 3 things to watch this week:
1. Stimulus deadlock
Investors are anxious to hear if more fiscal stimulus is coming as surging virus cases lead to fresh containment measures and business closures in many U.S. states.
But Congress missed another deadline on Friday to deliver a new fiscal aid package to help revive the economy. The Senate instead passed a stop-gap extension of government funding to allow more time for lawmakers to work out a larger spending package, including coronavirus relief.
A deal remains elusive after a months-long standoff between Republicans and Democrats over the size of the potential package. Over 13 million people are due to lose unemployment benefits on Dec. 26 without quick action by Congress.
2. U.S. COVID vaccine campaign gets underway
The first doses of the vaccine developed by Pfizer ($PFE) and German partner BioNTech SE ($BNTX) will be delivered to 145 locations around the United States on Monday, marking a turning point in the pandemic that has killed more than 295,000 Americans.
Millions of Americans could begin getting vaccinated this month, especially if a second vaccine from Moderna ($MRNA) is approved rapidly. Other companies with vaccines in advanced development include AstraZeneca ($AZN) with Oxford University, and Johnson & Johnson ($JNJ).
3. Fed meeting
The Fed is to hold its final monetary policy meeting of 2020 against the background of a faltering economic recovery.
The U.S. jobs report for November pointed to a loss of momentum in the labor market and the latest jobless claims data hit the highest since September amid fresh containment measures to curb the spread of the virus.
That may prompt policymakers to debate making changes to the bank’s asset purchase program or alter its forward guidance for future purchases, particularly as Congress continues to remain deadlocked over additional fiscal stimulus.
