The major U.S. index futures are currently pointing to a roughly flat open on Friday, with stocks likely to show a lack of direction following the advance seen in the previous session.
Traders may be reluctant to make significant moves amid uncertainty about the near-term outlook for the markets after yesterday's climb to record closing highs.
Optimism about a new fiscal stimulus bill contributed to the strength on Thursday, although traders may be waiting for more concrete developments before continuing to push stocks higher.
In remarks on the Senate floor, Senate Majority Leader Mitch McConnell, R-Ken., said an agreement on a new relief package appears to be "close at hand" and suggested lawmakers are likely to work through the weekend to reach a deal.
House Speaker Nancy Pelosi, D-Calif., also told reporters that progress has been toward an agreement, mirroring other recent optimistic comments from congressional leaders.
Upbeat news on the coronavirus vaccine front may help support the markets, with an FDA advisory panel giving a positive recommendation to Moderna's (MRNA) vaccine candidate.
Additionally, Johnson & Johnson (JNJ) said the first late-stage trial for its vaccine candidate is now fully enrolled, with the healthcare giant expecting interim data by late January.
After moving to the upside early in the session, stocks remained firmly positive throughout the trading day on Thursday. With the upward move on the day, the major averages all reached new record closing highs.
The tech-heavy Nasdaq saw further upside going into the close, reaching a new high for the session. The Dow rose 148.83 points or 0.5 percent to 30,303.37, the Nasdaq advanced 106.56 points or 0.8 percent to 12,764.75 and the S&P 500 climbed 21.31 points or 0.6 percent to 3,722.48.
The early strength on Wall Street came amid positive developments on the stimulus front, with lawmakers signaling progress toward an agreement on a new relief package.
Following a meeting with other congressional leaders, Senate Majority Leader Mitch McConnell, R-Ken., said the talks have made "major headway toward hammering out a targeted pandemic relief package that would be able to pass both chambers with bipartisan majorities."
Senate Minority Leader Chuck Schumer, D-N.Y., agreed that the two sides are "close to an agreement" but cautioned that it's "not a done deal yet."
Meanwhile, House Speaker Nancy Pelosi's Deputy Chief of Staff Drew Hammill said the Speaker, Schumer and Treasury Secretary Steven Mnuchin spoke Wednesday night as part of a series of phone conversations to complete the relief negotiations.
"All three emphasized the urgency to reaching an immediate agreement and will exchange additional paper and resume conversations in the morning," Hammill said in a post on Twitter.
The positive sentiment was partly offset by a report from the Labor Department showing an unexpected increase in first-time claims for U.S. unemployment benefits in the week ended December 12th.
The report said initial jobless claims rose to 885,000, an increase of 23,000 from the previous week's revised level of 862,000.
The continued increase surprised economist, who had expected jobless claims to drop to 800,000 from the 853,000 originally reported for the previous week.
With the unexpected increase, jobless claims climbed to their highest level since hitting 893,000 in the week ended September 5th.
However, while the data has raised concerns about the outlook for the labor market, it could also put further pressure on lawmakers to reach an agreement on a stimulus bill.
Gold stocks showed a substantial move to the upside on the day, driving the NYSE Arca Gold Bugs Index up by 3.6 percent to its best closing level in a month. The rally by gold stocks comes amid a sharp increase by the price of the precious metal.
Considerable strength was also visible among housing stocks, resulting in a 2.8 percent jump by the Philadelphia Housing Sector Index. The index reached a nearly two-month closing high.
The strength among housing stocks came after the Commerce Department released a report showing housing starts unexpectedly increased in the month of November.
The report also showed building permits, an indicator of future housing demand, spiked much more than expected to a fourteen-year high.
Biotechnology, networking and chemical stocks also saw significant strength on the day, moving higher along with most of the other major sectors.
Commodity, Currency Markets
Crude oil futures are inching up $0.06 to $48.42 a barrel after climbing $0.54 to $48.36 a barrel on Thursday. Meanwhile, after spiking $31.30 to $1,890.40 an ounce in the previous session, gold futures are edging up $0.70 to $1,891.10 an ounce.
On the currency front, the U.S. dollar is trading at 103.32 yen versus the 103.11 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.2251 compared to yesterday's $1.2268.
Asia
Asian stocks ended mostly lower on Friday amid fresh U.S.-China tensions and growing fears over a no-deal Brexit.
U.S. lawmakers continued negotiations to clinch a deal for a new stimulus package, with Senate Majority Leader Mitch McConnell saying talks could spill into the weekend.
On the Covid-19 front, Moderna said its Covid-19 vaccine received a recommendation for emergency use by an expert panel to the U.S. Food and Drug Administration.
Chinese shares ended lower after Reuters reported that the United States is adding dozens of Chinese companies, including the country's top chipmaker SMIC, to a trade blacklist.
The benchmark Shanghai Composite Index slipped 9.98 points, or 0.3 percent, to 3,394.90, while Hong Kong's Hang Seng Index ended down 179.78 points, or 0.7 percent, at 26,498.60.
Japanese shares edged lower as cumulative Covid-19 cases in Tokyo topped 50,000 and Gov. Yuriko Koike urged people to take increased anti-virus measures during the year-end and New Year holiday period.
The Nikkei 225 Index dipped 43.28 points, or 0.2 percent, to 26,763.39, while the broader Topix ended nearly flat at 1,793.24. Markets showed little reaction to the Bank of Japan's interest rate announcement.
The central bank extended its special support programs for pandemic-hit businesses and unveiled a plan to probe more effective ways to achieve its 2 percent inflation target.
The announcement came after official data showed that core consumer prices fell 0.9 percent in November, which was the fastest in more than a decade.
Sony climbed 2.3 percent on expectations over stay-at-home demand as the peak holiday season approaches. Toyota Motor declined 1.1 percent on profit taking after rallying to the highest level since August 2015 in the previous session.
Australian markets fell sharply as the growing threat of the Northern Beaches coronavirus cluster in Sydney dented hopes of a swift economic recovery from the pandemic.
The benchmark S&P/ASX 200 Index dropped 81.20 points, or 1.2 percent, to 6,675.50 after hitting a nearly 10-month high in the previous session. The broader All Ordinaries Index ended down 76 points, or 1.1 percent, at 6,924.10.
Airline Qantas lost 3.5 percent and smaller rival Regional Express Holdings plunged 5.4 percent as states and territories announced new border restrictions, throwing Christmas travel plans for thousands of people into chaos.
The big four banks fell between 1.4 percent and 2 percent. Oil Search, Santos and Beach Energy gave up 2-3 percent despite an uptick in oil prices.
Gold miner Evolution Mining rallied 3.7 percent and Northern Star Resources climbed 2.2 percent after gold prices hit a more than one-week high on Thursday on hopes of more U.S. stimulus.
Seoul stocks ended flat with a positive bias as renewed optimism over U.S. stimulus talks offset a spike in local Covid-19 cases. South Korea reported 1,062 new coronavirus cases today, marking its second-highest ever daily tally. Celltrion advanced 1.3 percent, while SK Hynix shed 0.8 percent and LG Chem declined 1.9 percent.
Europe
European stocks have moved higher on Friday after Moderna's coronavirus vaccine won backing from a panel of experts who advise the U.S. FDA, setting the stage for the rollout of the second Covid-19 vaccine in the United States.
The upside has been capped by fresh U.S.-China tensions, little progress on a federal spending deal in Washington and continued uncertainty over Brexit.
Reuters reported that the United States is adding dozens of Chinese companies, including the country's top chipmaker SMIC, to a trade blacklist.
U.S. lawmakers continued negotiations to clinch a deal for a new stimulus package, with Senate Majority Leader Mitch McConnell saying talks could spill into the weekend.
The German DAX Index is up by 0.3 percent and the U.K.'s FTSE 100 Index is up by 0.2 percent, although the French CAC 40 Index has bucked the uptrend and edged down by 0.1 percent.
The British pound has fallen as Britain and European Union negotiators played down expectations a Brexit deal will be reached.
Speaking in the European Parliament, Michel Barnier, the EU's chief negotiator, said it was "the moment of truth" for the two sides to come to an agreement.
European Commission President Ursula von der Leyen said bridging "big differences," particularly on fishing rights, would be "very challenging," while Prime Minister Boris Johnson said discussions were in a "serious situation/"
Dutch health technology firm Philips has jumped after it agreed to buy U.S. cardiac diagnostics and monitoring firm BioTelemetry in a deal worth $2.8 billion.
Nordic paint and coatings company Tikkurila has also spiked after U.S.-based PPG Industries agreed to buy the company for 25.00 euros per share in cash, valuing the company at about 1.1 billion euros, including the assumption of debt and cash.
Danish pharmaceutical company Novo Nordisk A/S has moved higher as it announced the submission of a Marketing Authorisation Application to the European Medicines Agency for subcutaneous semaglutide 2.4 mg, a once-weekly glucagon-like peptide-1 (GLP-1) analogue for weight management.
Consumer goods giant Unilever has edged. The company said it would resume brand advertising on social media newsfeed platforms Facebook, Instagram, and Twitter in the U.S. starting in January.
British oil & gas company BP Plc has also risen after it announced the appointment to its board of Karen Richardson and Johannes Teyssen as non-executive directors.
French ophthalmic company EssilorLuxottica SA has also advanced. The company said that its founder and executive chairman, Leonardo Del Vecchio, will voluntarily step back from his executive responsibilities in the company and remain non-executive chairman of the company.
In economic news, the euro area current account surplus rose to 27 billion euros in October from 25 billion euros in the previous month, driven by trade in goods and services, data from the European Central Bank showed.
U.K. retail sales volume dropped 3.8 percent month-on-month in November, in contrast to the 1.3 percent rise logged a month ago, a government report revealed. This was the first decline in seven months but was smaller than the economists' forecast of -4.2 percent.
Separately, market research firm GfK said a gauge of confidence among British consumers jumped by the most in eight years in December, boosted by the rollout of the first covid-19 vaccine program in the country.
The closely watched German IFO business climate index climbed to 92.1 in December from an upwardly revised 90.9 points in the previous month.
U.S. Economic Reports
The Conference Board is scheduled to release its report on leading economic indicators in the month of November at 10 am ET. The leading economic index is expected to rise by 0.5 percent.
At 11 am ET, Chicago Federal Reserve Bank President Charles Evans is due to give opening remarks before a virtual Project Hometown "Indianapolis after the Covid-19 Pandemic" event.
Federal Reserve Governor Lael Brainard is due to speak on "Climate Change and Financial Regulation" before a virtual event hosted by the Center for American Progress.
Stocks In Focus
Shares of BioTelemetry (BEAT) are moving sharply higher in pre-market trading after the medical technology company agreed to be acquired by Philips (PHG) for $72 per share in cash or about $2.5 billion.
Recreational vehicle maker Winnebago (WGO) is also likely to see initial strength after reporting better than expected fiscal first quarter results and saying demand appears to be strengthening heading into 2021.
On the other hand, shares of FedEx (FDX) may move to the downside after the delivery giant reported fiscal second quarter results that exceeded estimates but said rising coronavirus infections have clouded its near-term outlook.
Office furniture maker Steelcase (SCS) is also likely to come under pressure after reporting fiscal third quarter earnings that beat expectations but on revenues that missed estimates.
For comments and feedback contact: editorial@rttnews.com
