Markets are closing this week in a mixed manner. European stock indices are generally unchanged with German DAX up by 0.27%, British FTSE100 down by 0.93%. U.S. stock indices are slightly better with the S&P 500 broad market index, Dow Jones and High-Tech Nasdaq up by 0.5% in average.
Unexpected closing considering the inspiration that investors had in the beginning of this week after U.S. President-elect Joe Biden announced new multi-trillion relief plan. However, some negative factors has offset that positive sentiment.
German Economy Minister Peter Altmaier said that the economy is likely to grow less strongly this year than previously forecasted as the current situation in the COVID-19 pandemic is much worse than expected. ECB said in its monetary policy statement that the recent relief package of 500 billion Euro was struggling to be approved. U.S. initial jobless claims readings were much higher than expected, at 965,000 vs 795,000 forecasted reviving fears of slower than expected economic recovery in the United States.
Nevertheless, markets may gain additional optimism amid positive revenue reports from American banks and retail sales figures. In this case we may expect S&P 500 broad market index to gain further towards the 4000 points target with JP Morgan and Citigroup taking a lead in the green zone.
Crude market is likely to follow trends in stocks with Brent crude benchmark trying to recover up to $56-56.5 per barrel. Gold prices are likely to move sideways within the range between $1835 and $1865 per troy ounce. However, a target area for gold prices of $1650-1700 per ounce is still intact.
The Greenback is not expected to perform a huge volatility. Investors are likely to focus on the next week, waiting for inauguration of Joe Biden as a President of the United States, and also the ECB’s possible monetary actions and statements. So, we may expect major currencies to remain close to the current levels. Technical targets for EUR/USD at 1.2000, for GBP/USD – at 1.3200, and USDJPY – at 105.50 remain intact.