European shares managed modest gains overnight but the S&P 500 fell for the fourth straight session as lockdowns loomed. London and some surrounding areas re-enter strict lockdowns from today, and the Mayor of New York warned the city is heading the same way. The news hit major markets, with bonds and gold falling alongside US shares and industrial commodities.
The slide in market sentiment defied the start of the US vaccination program. Healthcare workers and Washington insiders will receive inoculation first, with officials estimating the US will reach herd immunity by “summer”. The faltering US indices may mean the markets have already hit peak recovery optimism, and there’ll be no Santa Claus rally for US investors.
Crude oil markets staged a remarkable recovery late in the session after initially sliding on news that OPEC has cut its demand forecasts. An attack on a fuel tanker in the Saudi port of Jeddah continues recent attempt by terrorists to disrupt oil markets, and saw the Brent contract erase losses and move into positive territory by the US close.
The pressure on other commodity markets was softened by the US dollar index hitting a 32 month low. However there was little activity in currency markets, other than cryptos. Although Bitcoin remains below US $20,000, other coins played catch up, led by a 13%+ jump in Monero to all-time highs.
Shares in Japan and Australia are looking at opening losses, according to futures markets. China retail sales are expected to have lifted by 5.0% in November, bringing year to date data to a level 4.9% below the same time last year. Industrial production is forecast to increase by 7.0% for the same period. However the increasing tension between China and the rest of the world may mean these releases receive less attention than usual.
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