Adam Vettese, UK Market Analyst at eToro, has provided his daily commentary on traditional and crypto markets for December 11, 2020.
European markets have opened in the red as investors dial down their risk as Brexit negotiations near a critical point ahead of Sunday’s deadline. In addition to this, an agreement on a US fiscal stimulus package still looks some way off. Despite some vaccine optimism, US index futures are trading down 0.5%.
In the US on Thursday, weekly initial jobless claims data gave investors cause for concern, surging to 853,000 in the latest week of data, up from 730,000 the week prior. New Covid-19 cases in the US are running at more than 200,000 a day, which is forcing a return to stricter social distancing restrictions for many companies and hurting the labour market. Late in the day, however, the US Food and Drug Administration’s vaccine advisory committee voted to recommend emergency approval for Pfizer and BioNTech’s Covid-19 vaccine, with seventeen in favour, four nos and one abstention according to CNN. That sets the stage for a final decision from the FDA, which still needs to accept the recommendation.
Airbnb share price more than doubles on first trading day
Short-term rental platform Airbnb’s flotation was the big news in US markets on Thursday, as the company’s share price hit more than double its IPO price on its first day of trading. Having set a $68 price on Wednesday evening, the company opened at $146 a share and closed the day out at $144. That values the company at close to the $100bn mark, just months after it laid off a quarter of its staff to cope with the impact of the pandemic.
Overall, US stocks were mixed on Thursday, with the S&P 500 and Dow Jones Industrial Average both marginally in the red, while the Nasdaq Composite added 0.5%. In the S&P 500, energy stocks were the standout performer, adding 2.9%, as Brent crude prices passed the $50 mark. Oil exploration firms Occidental Petroleum and Apache led the index with gains of 9.9% apiece, followed by Twitter which added 8.4%. Twitter’s share price jump was driven by news of an integration with Snapchat that will allow users to share tweets via Snapchat.
- S&P 500: -0.1% Thursday, +13.5% YTD
- Dow Jones Industrial Average: -0.2% Thursday, +5.1% YTD
- Nasdaq Composite: +0.5% Thursday, +38.3% YTD
Oil stocks, miners lead the FTSE 100 higher
London-listed shares also faced a mixed Thursday, with the FTSE 100 up by 0.5% and the FTSE 250 down 0.6%. A drop in the value of Sterling played a factor, given the FTSE 100’s greater exposure to overseas earnings – which get a boost when the pound is weaker. Oil stocks led the FTSE 100, reacting similarly to their American counterparts to the news of oil crossing the $50 per barrel mark. BP added 4.5% to its share price, while Royal Dutch Shell gained 3.8%. Mining stocks also enjoyed a positive day, with BHP Group, Evraz, Rio Tinto and Antofagasta all up by more than 2%. At the bottom of the index were banks and homebuilders, although the biggest loser was online grocery store Ocado Group which fell by 7.2%. That slump came despite the company raising its full-year profit guidance for the third time in 2020, as the firm is one that stands to take a hit from a successful Covid-19 vaccination program.
- FTSE 100: +0.5% Thursday, -12.5% YTD
- FTSE 250: -0.6% Thursday, -9.7% YTD