US Market Open US indices to open lower

US markets are set to open lower on Tuesday, following the falls seen in European markets. We have a look at what to expect for stocks, forex and commodities ahead of the US open.

Downtrend 2

Markets focus on next US stimulus package

Focus is on whether a new stimulus package can be introduced before the US faces a possible government shutdown as funding for federal agencies is due to run out on Friday. The house speaker Nancy Pelosi and Senate majority leader Mitch McConnell are expected to attach new measures of relief to an existing spending bill.

Votes are expected to be cast this week, possibly on Wednesday, to extend talks about how the next stimulus package will shape up as many measures – like bans on evictions and enhanced unemployment benefits – are due to expire at the end of this month.

California tightens restrictions as it reports record coronavirus cases

The state of California has tightened restrictions after reporting a surge in COVID-19 cases and hospitalisations. Around 85% of the state are being told to stay-at-home under a new lockdown, shuttering many businesses. Hospitality businesses are closed but retailers are allowed to remain open, albeit at significantly reduced capacity. The latest lockdown is in response to the 30,000 infections that California reported on Sunday – its highest daily number on record.

US indices called to open lower

Fears about the coronavirus pandemic and tensions over the need for a new stimulus package has unnerved markets ahead of the open, which are set to open lower after recently hitting new record highs.

The S&P 500 is called to open 0.3% lower at 3670.4 compared to 3682.7 at yesterday’s close.

The Dow Jones is set to open at 29911.0, down 0.3% from 6520.3.

In terms of economic data, attention is on US labor costs and non-farm productivity at 1330 GMT.

Tesla to raise up to $5 billion in shares

Tesla said it has entered into an equity distribution agreement with some banks to sell shares worth up to $5 billion. The company’s shares are currently at record highs and the stock is expected to join the S&P 500 shortly, and Tesla appears to keen to capitalise.

European indices down at midday

GDP revisions in the Eurozone showed seasonally-adjusted GDP increased 12.5% in the third quarter, with the EU reporting a rise of 11.5%, confirming the rebound in activity from the second quarter. Meanwhile, employment was up 1% quarter-on-quarter in the euro area and 0.9% in the EU.

Notably, the Eurostat report said the UK’s GDP grew 15.5% compared to the second quarter, although underperformed Europe on a year-on-year basis. It showed employment decreased 0.5% in the UK in the third-quarter.

Germany’s DAX is down 0.3% at midday at 13208.5.

France’s CAC 40 is also down 0.3% at 5524.3.

Norwegian Air secures additional creditor protection

Norwegian Air has secured additional creditor protection from a court in Norway on Tuesday, allowing the struggling airline to continue with its restructuring plans. The airline is hoping to convince its creditors that it can emerge from the coronavirus pandemic that has hit the travel industry hard.

SAP CEO responds to Saleforce’s takeover of Slack

The chief executive of German software outfit SAP, Christian Klein, has said the company does not feel pressure to make a grand takeover in response to its rival Salesforce buying workplace collaboration app Slack for $27.7 billion. However, the CEO did say its Qualtrics unit, which it bought for $8 billion two years ago, could be bolstered through acquisitions once it completes its upcoming US listing.

Deutsche Bank, Citigroup and ANZ face trial over criminal cartel case

Deutsche Bank, Citigroup and Australia and New Zealand Banking Group were committed to stand trial in Australia on Tuesday after pleading not guilty to collusion during a share issue. It is the country’s biggest white collar crime case looking into a AUD2.5 billion stock issue by ANZ two years ago.

FTSE 100 holds steady

The FTSE 100 is trading marginally higher at midday at 6525.8, 0.1% higher than the close on Monday.

Brexit: Prime minister says ‘power of sweet reason’ will allow deal to be reached

UK prime minister has told the BBC that the ‘situation at the moment is very tricky’ but that  he hopes the ‘power of sweet reason’ will allow a last-minute deal to be struck with the EU.

‘We will see where we get to in the course of the next two days, but I think the UK government's position is that we are willing to engage at any level, political or otherwise, we are willing to try anything,’ Johnson said. ‘But there are just limits beyond which no sensible, independent government or country could go and people have got to understand that.’

Johnson will head to Brussels to have a face-to-face meeting with European Commission president Ursala von der Leyen later this week, with negotiators continuing to try and break the impasse on three key sticking points - fisheries, governance and the level playing field - in the meantime.

The urgency of the situation is growing, especially as the EU’s chief negotiator Michel Barnier has set Wednesday as a new deadline so any agreement can be presented to member states during the two-day European Council meeting that starts on Thursday.

Ashtead posts steep fall in profits but raises guidance

Ashtead, which rents out tools and equipment, said revenue fell 3% in the first-half to £2.55 billion while pretax profit plunged 22% to £506 million. Still, chief executive Brendan Horgan said he was pleased with the performance and that Ashtead had outperformed the wider market. The company reported ‘record’ free cashflow in the period, allowing it to keep its interim dividend flat from last year at 7.15p. It said its full-year results should be better than it previously expected, assuming there is ‘no further significant adverse impact on our business resulting from the COVID-19 pandemic’.

Ferguson sales continue to grow despite pandemic pressure

Ferguson, the plumbing and heating products maker, said it demonstrated the resilience of its business model by posting a 3.1% in revenue during the three months to the end of October, adding that it had continued to deliver ‘low single digit revenue growth’ since then. It said it remains cautious over its outlook because of the pandemic, but that it currently believes it will meet its targets for the full-year.

KAZ Minerals upgrades guidance and adjusts takeover offer

KAZ Minerals said the proposed buyout of the company by its chairman Oleg Novachuk and Vladimir Kim will now be conducted through a direct takeover offer after minority shareholders opposed the original deal. This will give the deal a greater chance of going through than under the previous court sanctioned scheme of arrangement. KAZ simultaneously announced that it expects to produce 2% to 3% more copper and gold over the full year than previously guided.

Forex: Sterling continues to slide

The pound took a battering on Monday, shedding over 1% against the euro and the dollar as limited progress was made in Brexit talks, and the deadlock continues to weigh on sterling today.

GBP/USD traded at 1.33157 at midday, down 0.5% from 1.33837 at the close on Monday. 

EUR/GBP traded at 0.90955, having strengthened 0.5% from 0.90498 at yesterday’s close.

GBP/CAD was down 0.4% at 1.28047 while GBP/AUD was also 0.4% lower at 1.79608.

Find out more about trading forex here.

Commodities: Gold and oil lose minor ground

Gold trades at $1,862.1 per ounce at midday, broadly flat from $1,862.7 at the close of trade on Monday. The safe-haven had been losing steam since positive news about a COVID-19 vaccine saw the market’s appetite for riskier assets increase, but the metal is currently trading near two-week highs.

Find out more about trading gold here.

Brent trades at $48.51, slightly lower than $48.62 at the close yesterday. Last week, prices hit their highest level since March, buoyed by an agreement between OPEC and Russia to address fears of over-supply, as well as the softness in the dollar. However, rising coronavirus cases have come back into play and weighed on prospects for future demand. Reuters reports this morning that OPEC and Russia are likely to hold their next policy meeting on January 4, citing sources.

WTI has also lost some ground and traded at $45.50 at midday compared to $45.65 at yesterday’s close. US API weekly crude oil stocks, which indicates the country’s level of demand for oil, will be released at 2130 GMT.

Find out more about trading the volatility in oil here.

Tuesday’s economic calendar

The economic calendar is light for the rest of Tuesday, with attention turning to the US at 1330 GMT, when unit labor costs and non-farm productivity for the third-quarter will be released.

Look at what the rest of the week has in store using our Economic Calendar, and stay up to date with the latest news and analysis here.

Time (GMT)





Unit Labor Costs for Q3



Non-Farm Productivity for Q3



Redbook Index for Dec 4 (MoM and YoY)



3-Year Note Auction



API Weekly Crude Oil Stock for Dec 4


New Zealand

Manufacturing Sales for Q3


New Zealand

Westpac Consumer Confidence for Dec



Machinery Orders for Oct (MoM and YoY)

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