Daily Market Report by GulfBrokers 2020-2021

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Global stocks and Wall Street ended higher in November. The S&P 500 climbed 10.8% for the month, its biggest monthly gain since April. While the Dow has added almost 13% so far, which would be the best month since January 1987. The energy stocks in the S&P 500 ended November with an above 25% gain supported by the strong rebound in the crude oil prices.

EQUITIES

Wall Street recovered from the early session losses and closed higher on Monday lifted by positive vaccine news from Moderna. Moderna (NASDAQ: MRNA) shares extends its surge and closed 20% higher on Monday after the company said it applied an Emergency Use Authorization from the FDA for its COVID19 vaccine.

OIL

Crude oil prices trading unchanged on Tuesday as investors on doubts whether OPEC and other oil-exporting countries could agree in postpone its planned production increase in January.

CURRENCIES

In the currency market, the Asian currencies trading higher supported by better-than-expected China manufacturing data. On the other hand, the US dollar slightly rebounded from the two-year lows during the previous session ahead of Fed Chair Jerome Powell's two days of congressional testimony.

GOLD

Gold prices slightly recovered from the early losses on Monday. Meanwhile, the precious metal closed in November below $1,800 for the first time since the end of June.

Economic Outlook

On the data front, US October pending sales declined 1.1%, a second consecutive decline and Chicago PMI came below expectations 58.2 in November compared to the prior month of 61.1 and the consensus estimate of 59.0.

RBA December meeting highlights

On Tuesday, during the Asian session, the Reserve Bank of Australia left its cash rate unchanged at a historic low of 0.1% during its December meeting. RBA Governor Philip Lowe said the bank is doing its best to revive the nation from its current COVID-19 recession.

"In Australia, the economic recovery is underway and recent data have generally been better than expected. This is good news, but the recovery is still expected to be uneven and drawn out and it remains dependent on significant policy support," RBA governor Lowe said.

Moving ahead today, the important events to watch:

EUROZONE – Consumer price index: GMT – 10.00

US – ISM manufacturing PMI: GMT – 15.00

Coronavirus update:

As of Monday evening, more than 63.1 million cases of COVID-19 had been reported worldwide, with more than 40.3 million of those considered recovered, according to Johns Hopkins University.

Technical Outlook

EUR/USD:
The currency pair hovers near the 1.1950 level on Tuesday after the pair failed to break above the psychological level 1.20 during the previous session.

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The important levels to watch for today: Support- 1.1940 and 1.1910 Resistance- 1.20 and 1.2030.

GOLD: The yellow metal trading above $1785 on Tuesday after the metal found some support near the $1760 demand zone. Meanwhile, the overall momentum remains mixed.

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The important levels to watch for today: Support- 1774 and 1762 Resistance- 1790 and 1800.

Quote of the day: I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful – Warren Buffet.

Read more- https://gulfbrokers.com/en/daily-market-report-219
 
Global markets are trading higher lifted by positive vaccine news from Moderna and upbeat China data.

Moving ahead the key economic events and earnings to watch this week
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Zoom Video Communications (NASDAQ: ZM) reported better-than-expected third-quarter financial results on Monday. During the previous quarter, the company revenue surged by 355% and especially in the Middle East and Africa saw revenue growth of 629%. While its operating profit for the quarter was $192.2 million, compared with an operating loss of $1.7 million for the same period a year ago.

  • Earnings per share: $.99 vs. $.76 expected
  • Revenue: $777.2 million vs. $694 million expected
“We expect to strengthen our market position as we finish the fiscal year with an increased total revenue outlook of approximately £1.93 billion to £1.94 billion for fiscal 2021, or approximately 314% increase year over year.” Zoom CEO Eric Yuan said.

Recently stay-at-home stocks came under pressure after biotech firms Pfizer and Moderna announced positive clinical data. The positive vaccine optimism made an immediate effect on Zoom shares as hopes were raised that people won’t spend the rest of their lives on videocalls.

Zoom called for fiscal fourth-quarter adjusted earnings of 77 cents to 79 cents per share on $806 million to $811 million in revenue.

HASH


Zoom shares slipped 5% after the Q3 results on Monday while the stock climbed more than 590% since the start of the year. On Tuesday, in the pre-market trading, the stock trading near the $450 area and the expected trading range for this week is between $400 supports and $500 resistances.

Read more- https://gulfbrokers.com/en/zoom-shares-fell-despite-strong-q3-earnings
 
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Recently, crude oil prices enjoyed 4 consecutive week rally after upbeat vaccine news. The rally also supported by the Biden’s victory in the hopes that he will soon announce a large fiscal stimulus package that could support demand for oil.

Development of the Oil market​

(Jan 20 – March 20) During the first quarter of 2020 crude oil prices plummeted after the COVID-19 has weakened the energy demand worldwide and the demand took the biggest hit seen in years at a time where production was reaching new highs. In March 2020, the oil price reached the lowest level since 2002 as travel restrictions and lockdowns in major economies wipe out millions of barrels of oil per day of global oil demand.

(April 20 – June 20) At the beginning of the second quarter, the oil prices started to pick up after OPEC+ group has agreed to a historic production cut in early April. The production cut started on 1 May 2020, for an initial period of two months that concludes on 30 June 2020. The OPEC received additional support from Iraq and Kazakhstan both the countries agreed to increase their compliance with the deeper supply cuts agreed on by OPEC+ nations.

(July 20 – Sep 20) During the third quarter, the oil prices traded steady on hopes for a recovery in vehicle traffic and fuel demand as some European and Asian countries, along with several US states, began to ease coronavirus lockdown measures.

(Oct 20 -present) Moving into the end of the year the oil prices rebounded from the previous month lows and surged to 8 months with the hopes that global oil demand would gradually increase in coming months once the new vaccine starts to be distributed around the world. Meanwhile, in October month the crude oil prices faced some downside pressure after certain countries are forced to reinstate lockdown measures and negative World Energy Outlook 2020 report.

Here are the major hurdles oil market faced so far this year
  • Coronavirus cases and its effects on global economic recovery.
  • An oil price war between Saudi Arabia and Russia.
  • Oversupply concerns due to the instability in US crude inventories.
  • Renewed lockdown restrictions in the US and Europe.

Will Joe Biden’s Presidency might be another challenge for the oil market?

Some of the market participants still believe that President-elect Biden will increase regulation of the oil sector and he may stop issuing drilling permits for federal lands and waters, which would shrink US oil production by up to 2 million b/d by 2025. On the positive side, hope for a large-scale coronavirus relief package and trade relations with China could be other reasons where a Biden presidency could be positive for short-term demand.

WTI Crude technical outlook

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Technically the overall momentum remained bullish for the US crude oil prices throughout this month. In the short term if the bullish momentum continues the next upside levels to watch $46 and $48. On the flip side, the first immediate support can be found at $43.80 and then $43. In the long term, watch for weekly closing above $50 or below $40 area, that will give a larger confirmation of direction in the long term.


Conclusion

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Considering the recent bullish move the oil investors will closely monitor Joe Biden upcoming actions as he aims to tackle climate change and support renewable energy development. In the coming weeks, we expect a weaker US dollar, positive vaccine optimism and improving demand and supply fundamentals continue to support the oil market. This week the investors also looking forward to the fresh updates from the OPEC meeting. According to Reuters, the two days OPEC meeting delayed to December 3rd. The meeting was originally due to have taken place on December 1st.

Read more- https://gulfbrokers.com/en/development-of-the-oil-market-from-pandemics-lows
 
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EURO climbed to the highest level in two and a half years on Wednesday supported by the weaker dollar. The US dollar struggling to find an upside momentum as the risk sentiment in global markets improves over-optimism related to vaccine developments.

EQUITIES

Asian shares traded higher on Wednesday as investors cheered the news about the Pfizer and BioNtech have applied to the European medicines’ agency for conditional marketing authorization of their coronavirus vaccine. The European Medicines Agency revealed that it could conclude its assessment of Pfizer and Moderna’s vaccines by December 29 and January 12, respectively. While US futures trading unchanged after Federal Reserve Chairman Jerome Powell said that the outlook for the United States economy is extraordinarily uncertain, due to the rising numbers of coronavirus case.

OIL

Crude oil prices trading slightly lower on Wednesday after the two days OPEC meeting delayed as the investors eagerly waiting for the fresh updates from the OPEC members. On the other hand, the API inventory data showed the inventory increased by 4.1 million barrels last week.

CURRENCIES

In the currency market, the British pound retreated back below 1.3360 following the negative comments European Commission's Barnier. He said EU envoys that three main issues still unresolved, deal hangs in the balance.

GOLD

Gold prices trading steady on Wednesday. The recent bullish move supported by the news about a new stimulus bill. On Tuesday, US House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin will restart negotiations over a new stimulus package proposed by members of both parties.

Economic Outlook

On the data front, Australia’s gross domestic product increased by 3.3 per cent in the third quarter, the Australian Bureau of Statistics said on Wednesday. While Reserve Bank of Australia Governor Philip Lowe said that the economy was likely to experience a run of years with unemployment too high and wage increases and inflation too low.

Moving ahead today, the important events to watch:

US – ADP employment report: GMT – 13.15

US – EIA Crude inventory report: GMT – 15.30

Coronavirus update:

Worldwide, more than 63.4 million people have been confirmed infected and more than 1.47 million have died, according to Johns Hopkins University. The United States has passed 13.5 million confirmed cases, with more than 268,000 deaths from COVID-19, the highest totals in the world.

Technical Outlook

EUR/USD:
The currency pair trading steady above 1.20. During the Asian session, the pair reached a fresh session high of 1.2086.
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The important levels to watch for today: Support- 1.2040 and 1.20 Resistance- 1.2090 and 1.2150.

GOLD: The yellow metal trading above the short-term resistance $1820 lifted by the weaker dollar. Overall, the momentum remains bullish throughout the European session.
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The important levels to watch for today: Support- 1820 and 1816 Resistance- 1826 and 1832.

Quote of the day: In stock trading, if you are good, you are right six times out of ten. You are never going to be right nine times out of ten – Peter Lynch.

Read more- https://gulfbrokers.com/en/daily-market-report-220
 
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The British pound drops sharply against the EURO and the Australian dollar. Meanwhile, the Pound recovered from the early session losses against the US dollar. Overall, the momentum remains bearish throughout this week due to the post - Brexit uncertainty. On the other hand, UK shares surged for the third consecutive day lifted by the positive vaccine optimism.

EQUITIES

European and UK shares trading steady on Thursday supported by the recent positive vaccines’ news. Pfizer shares surged another 3% on Wednesday after the regulators in the United Kingdom have approved Pfizer's vaccine for use. So far, the UK has ordered 40 million doses of the Pfizer/BioNTech jab - enough to vaccinate 20 million people.

OIL

Crude oil prices trading higher ahead of the outcome from OPEC meeting. The market participants expect the OPEC+ alliance will extend output cuts into at least until March 2021.

CURRENCIES

In the currency market, the Australian dollar climbed to fresh monthly highs lifted by better-than-expected economic data. During the Asian session, Australia reported strong trade surplus data, the exports increased by 5% in October while imports rose by 1%. The data gave further upside momentum to the currency pair.

GOLD

Gold prices up for the third consecutive day after the US dollar plunged to the lowest level in two and half years. The yellow metal also received support on rising hopes for more stimulus.

Economic Outlook

On the data front, the China Caixin services PMI increased from 56.8 in October to 57.8 in November, that was better than the expected 56.5. On Wednesday, the US ADP employment data showed that private sector employment increased by 307,000 in November, the numbers came lower-than-expected 433K.

Moving ahead today, the important events to watch:

US – Weekly jobless claims: GMT – 13.30

US – ISM services PMI: GMT – 15.00

Coronavirus update:

Worldwide, more than 64 million people have been confirmed infected and more than 1.47 million have died, according to Johns Hopkins University. The United States has passed 13.7 million confirmed cases, with more than 271,000 deaths from COVID-19, the highest totals in the world.

Technical Outlook

EUR/USD:
The currency pair slightly retreated from the daily highs after mixed PMI data from Eurozone and Germany. On the downside, the crucial support to watch for today 1.2090/80 zones.

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The important levels to watch for today: Support- 1.2080 and 1.2040 Resistance- 1.2150 and 1.2180.



GOLD: The yellow metal hit fresh weekly highs of $1843 on Thursday. While on the upside, the gold price will face strong resistance around $1848/1850 zones.

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The important levels to watch for today: Support- 1832 and 1826 Resistance- 1843 and 1850.

Quote of the day: Twenty years from now you will be more disappointed by the things that you didn’t do than by the ones you did do – Mark Twain.

Read more- https://gulfbrokers.com/en/daily-market-report-221
 
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As per the recent report, Pfizer (NYSE: PFE) will likely be the first vaccine to reach the market. This one is the most heavily anticipated candidate by far is BNT162b2, the COVID-19 vaccine developed in partnership with German biotech BioNTech.

On Wednesday, the regulators in the United Kingdom have approved Pfizer's vaccine for use. So far, the UK has ordered 40 million doses of the Pfizer/BioNTech jab - enough to vaccinate 20 million people. The company also submitted a request to the FDA for Emergency Use Authorization (EUA) of their mRNA vaccine candidate.

The Pfizer vaccine appears 95% effective at preventing mild to severe COVID-19 disease in a large. Pfizer has a $1.95 billion agreement with the U.S. government to supply 100 million doses of the vaccine, with an option for another 500 million.

Few notable financial market movements after the recent positive vaccine news

  • Oil prices hit 8-month high
  • US stock market index Dow Jones climbed to the highest levels in eight months and hit the milestone 30000 during the previous week.
  • Gold price posted the biggest daily decline in over seven years.

Pfizer (NYSE: PFE) technical outlook

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In the short term, the stock can push further up continuing the uptrend with the first potential target should be $42.30 followed by $44 where the stock has strong resistance. On the flip side, any pullback might now be seen as a buying opportunity. The expected trading range for the next two weeks is between $35 supports and $44 resistances. In the long term, there are chances the stock may eventually rise to an all-time high of $50.03 but anyway it depends upon the FDA approval and successful vaccine distribution.



Other Biotech Stocks to Watch during COVID-19 vaccine race

  1. Moderna (NASDAQ: MRNA): Moderna was the first drugmaker with an experimental COVID-19 vaccine to begin clinical testing in humans in the U.S. On November 17, Moderna announced the Phase 3 study of mRNA-1273. The trial has met the statistical criteria pre-specified in the study protocol for efficacy, with a vaccine efficacy of 94.5%. The stock made a spectacular long-term price rally from $17.68 on January 7, 2020, to $178 on December 01, 2020, and up by more than 700% this year.
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  2. AstraZeneca (NASDAQ: AZN): Last week British Pharmaceutical giant AstraZeneca (NASDAQ: AZN) joined the lead for vaccine development and the company reported the late-stage trials showed its COVID-19 vaccine was highly effective. AstraZeneca’s vaccine, called AZD1222, is based on time-tested technology that has been genetically modified to stimulate an immune response against the coronavirus.
  3. Inovio Pharmaceuticals (NASDAQ: INO): The stock climbed more than 18% on last Friday after the company moves ahead with a phase 2 study, the phase 2 segment will evaluate the efficacy of Covid-19 DNA vaccine candidate called INO-4800 in adults in the US.
  4. Novavax (NASDAQ: NVAX): After few week’s downsides move the stock finally found a bottom after the FDA has granted Fast Track Designation for NVX-CoV2373, the company’s COVID-19 vaccine candidate. $NVAX is up 2,200% since the beginning of the year and closed 22% higher last Friday.
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Conclusion

The next coming weeks would be critical in determining whether the pharmaceutical giant will receive the FDA approval or not. The FDA is expected to review Pfizer’s vaccine when its Vaccines and Related Biological Products Advisory Committee next meets on Dec. 10.

On the other hand, the big question is how they are going to handle the vaccine distribution especially reaching rural populations and those without regular access to health care will be difficult. Cold storage has been discussed as a problem for distribution, but Pfizer, specifically, has come out and stated they have special packaging that will keep vaccines cold for weeks. It can be stored at 36 to 46 degrees Fahrenheit and can last nearly 30 days in the fridge. While other companies including Moderna, their cold storage requirements are a bit easier.

Recently, Dr Scott Chavers with Mobile County Health Department said, “Once FDA does grant approval for the use of the vaccines, they would be immediately ready for distribution,” The Mobile County Health Department is in the process of ordering a freezer that could handle 200,000 doses.

Read more- https://gulfbrokers.com/en/pfizer-the-next-game-changer
 
EURO was among the best-performer currency pair during this week and climbed to the highest level in two and a half years.

While considering the recent bullish move I expect there is a chance for a retracement.

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The U.S. non-farm payrolls report is one of the most important data scheduled for release later today. The consensus is for a decrease of 469k non-farm payroll jobs, and for the unemployment rate to decrease to 6.8%.

EQUITIES

Global shares and US futures trading higher boosted by the positive vaccine optimism and hopes for the second round of stimulus from Congress. As per the recent update, US President-elect Joe Biden urged Congress on Wednesday to pass a relief bill, with more aid to come next year.

OIL

Crude oil prices extends higher after OPEC+ announced that they have reached an agreement to pare current production cuts of 7.7 million barrels per day to 7.2 million barrels per day beginning in January.

CURRENCIES

In the currency market, the US dollar plunged to a new session low on Friday. Considering the recent USD sell-off the currency pair trading near the demand zones the further direction will depend on NFP figures which will release later today.

GOLD

Gold prices trading near the weekly highs supported by positive optimism over stimulus talks and the weaker US dollar.

Economic Outlook

On the data front, the ISM services PMI report showed that economic activity in the manufacturing sector grew in November, June’s PMI registered 58.4 against the expected 57.5. While the weekly jobless claims showed a drop to 712K, against the projected 775K.

On the post-Brexit front, Ireland’s Foreign Minister Simon Coveney said that there was a good chance that Britain and the EU could reach a post-Brexit trade agreement in the next few days.

Moving ahead today, the important events to watch:

US – Nonfarm payrolls: GMT – 13.30

CANADA – Employment report: GMT – 13.30

Coronavirus update:

Worldwide, more than 64.7 million people have been confirmed infected and more than 1.49 million have died, according to Johns Hopkins University. In the US, the total novel coronavirus cases soared past 14 million on Thursday.

Technical Outlook

EUR/USD:
The EURO was among the best-performer currency pair during this week. During the European session, the currency pair rose back to near the weekly highs lifted by better-than-expected German factory orders data.

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The important levels to watch for today: Support- 1.2130 and 1.2080 Resistance- 1.2175 and 1.2210.



GOLD: The yellow metal trading steady above $1840 ahead of US NFP data. The important levels to watch today $1850 and $1820.

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The important levels to watch for today: Support- 1832 and 1820 Resistance- 1848 and 1855.

Quote of the day: The difference between successful people and successful people is that really successful people say no to almost everything- Warren Buffet.

Read more- https://gulfbrokers.com/en/daily-market-report-222
 
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