U.S. Stocks May Lack Direction In Early Trading
Following the mixed close seen in the previous session, stocks may show a lack of direction in early trading on Tuesday. The major index futures are currently pointing to a roughly flat open for the markets, with the Dow futures down by just 1 point.
Traders may be reluctant to make significant moves amid uncertainty about the near-term outlook for the markets following the recent run to record highs.
Worries about a new coronavirus strain may generate some negative sentiment, although news of the approval of a new stimulus bill is likely to help support the markets.
The $900 billion relief package includes federal assistance for the unemployed, small businesses and healthcare providers as well as $600 in direct payments to individuals.
The relief package was attached to a $1.4 trillion government spending bill that funds the government through September 30th. The bill is expected to be signed by President Donald Trump in the coming days.
The upcoming holidays may also contribute to light trading activity, but some traders are likely to stick around for a slew of U.S. economic data on Wednesday.
On the U.S. economic front, the Commerce Department released revised data showing the U.S. economy grew by slightly more than previously estimated in the third quarter of 2020.
The report showed the spike in gross domestic product in the third quarter was upwardly revised to 33.4 percent from the previously reported 33.1 percent. Economists had expected the jump in GDP to be unrevised.
The Commerce Department said the unexpected upward revision primarily reflected larger increases in consumer spending and non-residential fixed investment.
Shortly after the start of trading, the National Association of Realtors is scheduled to release its report on existing home sales in the month of November. Existing home sales are expected to decrease by 1.0 percent in November after jumping by 4.3 percent in October.
The Conference Board is also due to release its report on consumer confidence in the month of December. The consumer confidence index is expected to inch up to 97.0 in December after slumping to 96.1 in November.
Stocks showed a significant recovery over the course of the trading session on Monday after moving sharply lower early in the day. The major averages climbed well off their early lows, with the Dow reaching positive territory.
After tumbling by more than 400 points in early trading, the Dow inched up 37.40 points or 0.1 percent to 30,216.45. Meanwhile, the Nasdaq edged down 13.12 points or 0.1 percent to 12,742.52 and the S&P 500 fell 14.49 points or 0.4 percent to 3,694.92.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan’s Nikkei 225 Index slumped by 1 percent, while China’s Shanghai Composite Index plunged by 1.9 percent.
Meanwhile, the major European markets have moved to the upside on the day. While the U.K.’s FTSE 100 Index has risen by 0.4 percent, the French CAC 40 Index and the German DAX Index have both jumped by 1.1 percent.
In commodities trading, crude oil futures are sliding $0.62 to $47.35 a barrel after tumbling $1.27 to $47.97 a barrel on Monday. Meanwhile, after falling $6.10 to $1,882.80 an ounce in the previous session, gold futures are edging down $0.10 to $1,882.70 an ounce.
On the currency front, the U.S. dollar is trading at 103.45 yen compared to the 103.32 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.2235 compared to yesterday’s $1.2244.
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