Weekly Market Update

Author : Rachel Poole
Date : December 19, 2020

Happy Holidays from the BlackSummit team!
Due to Christmas and the New Year, the Weekly Market Update will not be published on December 26th or January 2nd.

Global Market News

Global equities reach record levels
Global equities reached record levels this week as Covid-19 vaccines were rolled out in several developed countries, including the US. The yield on the US 10-year Treasury note rose 0.05% to 0.94%. The price of a barrel of West Texas Intermediate crude oil increased more than 5% to $49.06. Volatility, as measured by the Cboe Volatility Index (VIX), decreased a couple of points to end the week at 22.

Fed warns the economy remains “extraordinarily uncertain”
At the last Federal Reserve press conference of the year, Chairman Jerome Powell said “The outlook for the economy remains extraordinarily uncertain.” The Fed is keeping the federal funds rate near zero as we head into the new year. Powell assured investors that the bank will remain flexible and that what is needed right now is fiscal stimulus.

Updated Market Figures

Coronavirus Updates

Covid-19 by the numbers
Global Confirmed Covid-19 cases: 75,200,000 Global Covid-19 deaths: 1,670,000
US Confirmed Covid-19 cases: 17,400,000 US Covid-19 deaths: 313,000
*As of Friday evening

FDA grants emergency use authorization to Moderna’s vaccine
The FDA overwhelmingly voted to approve Moderna’s Covid-19 vaccine for emergency use this week. US officials expect to have 40 million doses of the Pfizer-BioNTech and Moderna vaccines by the end of the year. Vice President Mike Pence received a vaccine on national television this week to promote its safety.

Geopolitics Spotlight

More than 300 boys abducted in a raid in Nigeria have returned home
More than 300 boys were abducted by terrorists last week from a school in Nigeria. Though the assault was initially blamed on local gangs, Boko Haram, the jihadist terrorist group, claimed responsibility for the abduction on Tuesday. on Friday, Nigerian President Muhammadu Buhari confirmed that 344 of the boys have returned home safely. It is unknown if there are any others remaining with the captors.

Australia formally escalates China trade dispute
Australia has asked the World Trade Organization (WTO) to investigate the 80% tariffs China has imposed on its barley, formalizing the trade dispute between the two countries. In addition to barley, the trade dispute has affected Australia’s trade in wine, lobster, beef, timber, cotton, and coal. After several failed attempts to resolve the issue privately, going to the WTO was the logical next step.

US Social & Political Developments

Russian hackers infiltrated US government
Hackers allegedly linked to Russia’s foreign intelligence service infiltrated the highest levels of the US government, including the Department of Homeland Security, the State Department, and parts of the Pentagon. The Department of Homeland Security has ordered all federal agencies to disconnect from the SolarWinds software that was compromised. Hundreds of other US companies, including Microsoft which also reported it has been hacked, use the SolarWinds software and may have been at risk. The National Security Council is coordinating an investigation.

Electoral college confirms Biden’s win
The Electoral College voted this week to confirm Joe Biden’s win of the presidential election. Biden won with a solid majority of 306 votes despite President Donald Trump’s efforts to overturn the results.

Corporate/Sector News

States file antitrust lawsuit against Google
A group of more than three dozen state attorney generals has filed an antitrust lawsuit against Google’s on Thursday. The lawsuit challenges not only the core search engine but also monopolistic practices in the Google ad business and exclusive deals on phones and browsers.

Companies and residents flee the big city
Businesses and individuals have been moving from large US cities in droves now that the pandemic has led to a shift in remote work. New York has lost at least 300,000 residents so far this year and San Francisco, Los Angeles, Chicago, and D.C. have posted similar numbers. Several large US corporations, such as Oracle, Palantir, and Hewlett Packard Enterprises, are moving their headquarters from California to Texas and Colorado.

OPEC and the IEA cut their oil demand forecasts for 2021

OPEC and the International Energy Agency (IEA) have lowered their forecasts for oil demand growth in 2021 as the world still struggles to contain the Covid-19 pandemic. Global consumption for 202 is now expected to be 96.9M barrels per day which is 200,000 barrels per day lower than previous forecasts.