US stocks are in the green midweek as the increasing prospects of an effective vaccine give everyone a small skip in their step and outweigh nagging worries over surging infections. Prospects for a global economic rebound are also helping oil rise for a third straight day to two-month highs, while Gold sits just above major support hoping the bull bugs haven’t given up on it just yet.
Tech stocks look to be making a comeback today with the all-important FAANGs finding a bid. We remind ourselves (if we need it!) that those handful of companies have had such a monumental impact on the performance of the S&P500 in the last 12 months that any decline more or less guarantees the index will start to underperform the rest of the world. An exit from the overcrowded nature of the ‘long FAANGs’ trade may have further to run in time, especially if we get more positive vaccine news.
Further cementing the bullish mood are Wall Street banks with JPMorgan lifting its S&P500 target to 4,500 by the end of next year, which compares with Goldman Sachs recent new target of 4,300. King Dollar meanwhile is holding its own after dropping to 8-week lows at the start of the week.
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Palpable Relief in Oil
Oil is enjoying its seventh move up in the last nine trading days as the vaccine magic really helps to lift the commodity. The size of the move does look like it caught the market off guard as the demand picture is very unlikely to change in the near-term. With an OPEC+ meeting at the end of the month, do some members pull back from rolling over the current cuts if the rally continues?
Brent’s move higher has taken prices back to levels last seen at the start of September so this area around $45.50 to $46.50 may act as resistance. We’ve also just hit the 50-week Moving Average so some consolidation may be expected before any move higher.
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