US stocks were mixed on Tuesday, but bears dominated as concerns over the new COVID strain and downbeat economic data offset the optimism surrounding the second stimulus package. The S&P 500 fell 0.21%, the Dow lost 0.67%, while the tech-oriented Nasdaq rose 0.51% to update the all-time high, boosted by Apple. Small caps also expanded, with the Russell 2000 index updating the record high as well. Apple defied the market’s bearishness by gaining about 3% on the news that it plans to manufacture an electric vehicle by 2024. Bulls reacted to the approval of a stimulus package worth $892 billion, as the Congress voted the relief bill meant to support an economy struggling with the impact from restrictions.
Nevertheless, bears are stronger, as investors are worried that the new COVID strain discovered in Britain, which is said to be more infections, would trigger more lockdowns.
Stocks were also dragged down by the economic data released on Tuesday. Specifically, the Conference Board’s (CB) data showed that consumer confidence fell for a second straight month in December to a four-month low. CB cited the problems of the labor market and the delay of a second stimulus bill by Congress. The consumer confidence index declined to 88.6 in December, from 92.9 in November, while analysts expected an increase to 97.0 fueled by the vaccine roll-out.
Tesla fell another 4% on Tuesday, extending the decline on its second day as part of the S&P 500 index. The stock fell 10% since updating the record high on Friday.
In Asia, stocks are mostly bullish on Wednesday. At one point, they were retreating from session highs as US President Donald Trump said he wouldn’t back the stimulus bill that has just passed through Congress, as he aims for a larger relief bill. Nevertheless, bulls found support again after President-elect Joe Biden said that his administration would push for a third relief package early next year.
At the time of writing, China’s Shanghai Composite is up 0.54%, and the Shenzhen Component has gained 0.72%. Hong Kong’s Hang Seng Index is up 0.43%.
Japan’s Nikkei 225 closed 0.30% higher. The Bank of Japan released its October monetary policy meeting minutes earlier, voicing concerns that “deflation might take hold” if the coronavirus spreads again and drags on the economic activity.
South Korea’s KOSPI has gained over 1%.
LG Electronics said earlier today that it had agreed to create a $1 billion joint venture with automotive supplier Magna International to manufacture e-motors, inverters, and onboard chargers. The new entity will be called LG Magna e-Powertrain.
In Australia, the ASX 200 gained 0.66%.
By Strategy Desk
