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14.12.2020 03:15 PM
The US stock market is experiencing difficulties: the past week was not successful

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On the stock markets of the United States of America, following the results of the last working day last week, there was a multidirectional movement of the main exchange indicators. The reason for the incident was a rather serious uncertainty about the prospects of the US government's approval of a new financial assistance program, which was actively discussed again after the presidential election. Also, the situation around Brexit puts significant pressure on the markets. The authorities of the UK and the EU are still unable to overcome a lot of differences, which puts the negotiation process at a dead end. However, there is some positive information among the negatives. First of all, it concerns news about the development and implementation of a vaccine against coronavirus infection. Drugs that are being prepared for mass use can support the world's economy and help it move towards a more progressive recovery. At least, market participants have high hopes for this.

Most of all, of course, markets are worried about the impasse in the negotiation process on financial incentives in the United States. The seriousness of the situation became clear after the leader of the American Republican Party announced that he did not see any grounds for agreeing on the main issues of the legislative act at the moment. The main issues of concern at the moment are protecting businesses from claims that may arise against the background of the COVID-19 pandemic, as well as providing more expanded funding to local authorities. Until all the differences can be overcome, signing the program is out of the question, which negatively affects the general mood of investors.

Another problem is the huge number of controversial points in the trade agreement between the UK and the EU. According to the latest data from the European Commission, the parties have not been able to agree on ensuring fair conditions for sustainable competition in the market. This has put the entire process at a standstill, which can seriously harm the entire transaction.

Nevertheless, there is still some positive in the market. It is provided by the news that the United States Department of Health has prepared all the necessary documents recommending the emergency start of vaccination against coronavirus infection in the country using a drug developed jointly by two companies, Pfizer and BioNTech. To date, such permits are already available in Canada, Saudi Arabia, Bahrain, and the United Kingdom. The latter was the first to start vaccination, which is actively continuing at the moment. All this may have a positive impact on the global economic recovery in the near future. Meanwhile, this already has a positive effect on the mood of market participants.

As for the statistics on economic growth in the United States, they are quite good. In particular, the level of producer prices in the territory of the state for the last month of autumn slightly increased. Compared to the previous indicator, the increase was 0.1%. Thus, the growth rate was the lowest in the last seven months. At the same time, the preliminary data of experts were slightly higher: an increase of around 0.2% was expected.

The value of the consumer confidence index in America is also moving up. At the beginning of December this year, it reached the level of 81.4 points, while earlier it was 76.9 points. Such a high level has not been observed for nine months. At the same time, experts' forecasts were much more modest than real data. It was expected to decrease to an average of 76.5 points.

The Dow Jones Industrial Average index based on the trading session on Friday increased by 0.16%, or 47.11 points, which moved it to 30,046.37 points.

The Standard & Poor's 500 index, on the other hand, sank 0.13%, or 4.64 points. Its current level was around 3,663.46 points. It should be noted that this is already the third trading session in a row, during which the indicator is showing contraction.

The NASDAQ Composite Index parted from 0.23%, or 27.94 points, and moved to the level of 12,377.87 points.

Maria Shablon,
Pakar analisis InstaForex
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