Adam Vettese, UK Market Analyst at eToro, has provided his daily commentary on traditional and crypto markets for December 4, 2020.
Overnight global oil cartel OPEC and Russian producers agreed to increase their output by 500,000 barrels a day next month. The deal represents a modest uptick in oil production and a compromise between the group, which had been in disagreement earlier in the week. Oil demand is still under pressure from the Covid-19 pandemic, but the increase is equivalent to less than 1% of the global oil market, according to The WSJ. The group was split between nations which wanted an increase of up to two million barrels a day, and those which wanted to maintain production cuts. Oil prices have now cleared the $46 a barrel mark, and if progress continues the incentive to hold off on production may lessen.
In other news, investors watching US initial weekly jobless claim figures for signs that the country’s economic recovery is stalling were met with welcome news. The latest initial claims for state unemployment benefits fell by 75,000 for the week ended November 28th, to 712,000, following weeks of back-to-back increases since July.
Travel names lead the S&P 500
US stocks were mixed once again on Thursday, with the S&P 500 down a fraction and the Dow Jones Industrial Average up by 0.3%. In the S&P 500 the energy and real estate sectors gained 1.1% and 0.7% respectively, while the utilities sector fell 1.1% and the materials sector was down by 0.7%. Travel names were among the day’s biggest winners thanks to continued vaccine optimism, with Norwegian Cruise Line up 8.6%, American Airlines up 8.3% and United Airlines up 6.8%. In the Dow Jones Industrial Average, pharmacy retailer Walgreens Boots enjoyed the best day, with a 7.5% gain, followed by Boeing up 6%. Walgreens stock is now up by 14.1% over the past month, which has brought its year-to-date loss down to -27.4%.
One factor dampening optimism on Thursday was the news that the Covid-19 hospitalisations and deaths both set new records. While investors have been viewing vaccine progress favorably, the record figures are a stark reminder that there is still a long road ahead for the US economy.
- S&P 500: -0.1% Thursday, +13.5% YTD
- Dow Jones Industrial Average: +0.3% Thursday, +5% YTD
- Nasdaq Composite: +0.2% Thursday, +37.9% YTD
Rolls Royce leads FTSE 100 with a 15% gain
London-listed stocks continued to make progress on Thursday, with the FTSE 100 and FTSE 250 now up by 2% and 3.8% respectively over the past five trading days. The FTSE 100 has now gained 9.9% over the past month, while the FTSE 250 has surged by 15.3%. Rolls Royce led the index on Thursday with a 15.6% gain, after it said that the slump in air travel caused by the Covid-19 pandemic may give it the breathing room to develop new jet engine technologies and potentially re-enter the narrow-body airliner market, according to Bloomberg.
The FTSE 250 was led by Cineworld Group, which gained 14.5% on Thursday as investors piled into the stock following the UK’s approval of the Pfizer Covid-19 vaccine. Over the past five trading days, Cineworld stock is up 32.3%, and it has gained 157% over the past month. Year-to-date, the firm’s share price remains down 66.7%.
- FTSE 100: +0.4% Thursday, -14% YTD
- FTSE 250: +1.3% Thursday, -8% YTD