All major US indexes reached record highs last week in anticipation of a fresh fiscal stimulus package and a speedy vaccine rollout. Nasdaq and S&P 500 grew an impressive 3.1% and 1.3% respectively, while the Dow Jones Industrial Average climbed a modest 0.4%. Tech stocks did exceedingly well in the S&P 500 index with Apple and Microsoft posting splendid gains. Electric carmaker Tesla is set to join the S&P 500 following Monday. Long-term Treasury yields rose modestly to 0.94% and oil posted a weekly gain of 5.5% closing in marginally south of $50 per bbl.

November’s retail sales report last week showed a 1.1% decline in spending compared to the previous month and jobless claims last week continued to move higher to 885,000, the highest since September. The Fed has pledged to continue to buy more than $120 billion in assets per month till substantial improvement in unemployment and inflation has been achieved.

Coronavirus related deaths have crossed 300,000 with daily death count nearing 4,000. The FDA advisory panel has given its approval to Moderna’s vaccine and this should roughly double the number of doses available by year-end.



Stocks have been trending upwards mainly due to progressing stimulus talks in the US, positive purchasing managers index readings in major EU economies and developments with the coronavirus vaccines. Germany’s DAX Index rose 3.94%, the pan-European STOXX Europe 600 Index ended 1.48% and the UK’s FTSE 100 Index ended the week down a modest 0.3%. The Euro closed at 1.225 and Cable at 1.353 against the US dollar.

French President Emmanuel Macron started self-isolation after contracting COVID-19. After his announcement, the prime ministers of Spain and Portugal, who met with him at a dinner, quarantined themselves as a precaution. The UK imposed its toughest tier-3 regime on London and southern England while Germany tightened lockdown restrictions as virus deaths hit a new high. The EU would begin vaccinating against COVID-19 on December 27.

Post-Brexit trade deal negotiations are still ongoing with UK Prime Minister Boris Johnson saying that a no-deal scenario was “very likely” unless the EU’s position changed “substantially”. The main point of disagreement seems to be regarding the Fishing Rights as the UK Parliament is on standby for an emergency sitting before Christmas to consider the approval of a deal.



The Nikkei 225 Stock Average closed 0.4% higher (YTD 13.1% gain) as Japanese stocks performed well during the week. The yen strengthened and traded near JPY 103 against the US dollar on Friday. Investors reacted little to the Bank of Japan’s decision at its two-day monetary policy meeting that ended Friday. The BOJ Policy Board kept the central bank’s easing regime unchanged while deciding to extend its measures to help the Japanese economy weather the coronavirus fallout for six months until the end of September 2021. The Japanese government is also planning a record JPY 107 trillion budget for fiscal year 2021 which is aimed at Social welfare, military spending, and coronavirus initiatives.

Tokyo’s government has raised its medical alert level to 4 as hospital patients have increased to 2000 and are occupying more than 60% of Tokyo’s 3000-bed capacity.



The U.S. announced that it was blacklisting China’s top chipmaker SMIC, drone manufacturer DJI and more than 60 other companies for national security reasons. However, Chinese stocks still posted a weekly gain (benchmark SSE Index ended 1.4% higher). Despite tensions between the two countries, Investor appetite for Chinese companies in U.S. stock markets rose as China-based companies raised $11.7 billion through 30 initial public offerings this year (according to a report from Renaissance Capital).



Gold prices have ended the week at $1,880.45/oz well above their starting point of 1,827.64/oz. The main reason for this trend being weakening of the greenback, ultimately resulting in investors parking funds, into their primary safe-haven asset.



Renewed lockdowns and restrictions will certainly be a roadblock for economic recovery and growth. However, with rapid development and distribution of the vaccinations, we can expect things to stabilize in the medium to long term. Global stocks have rallied this week with positive stimulus talks in the U.S. and the Fed’s relaxed policies, but ultimately it would all come down to the final constituents of the package and its applications. Moving ahead, markets could generally get a lot calmer, as is always the case on the week of Christmas.