The S&P 500 posted its second week of losses this month as last-minute uncertainty remains over whether a long-awaited Covid relief package will land a signature from President Donald Trump before a Monday government shutdown deadline.
The Dow Jones Industrial Average ticked up 70 points, or 0.2%, Thursday, pushing it into positive territory for the week, while a 0.4% boost for the S&P cut its weekly losses to about 0.2%.
Shares of U.S.-listed Chinese tech giants tanked after China announced an antitrust probe into Alibaba for alleged monopolistic practices; the ecommerce giant’s shares on the New York Stock Exchange plunged 13%, representing about $92 billion in diminished market value.
Fellow China-based online retailer JD.com and Internet and search-engine behemoth Baidu fell about 1% amid the broader selloff.
On the deal front, fintech Square (down 1% Thursday) is reportedly in talks to buy Tidal, the struggling music streaming service founded by billionaire Jay-Z.
The Shanghai Stock Exchange Composite Index ended Thursday down 0.6%, while Japan’s Nikkei 225 climbed 0.5% and Germany’s DAX Index 1.3%.
“Markets don’t care too much about Trump’s criticism of the stimulus bill as a formal veto is considered unlikely, the joint stimulus-budget legislation passed both the House and Senate with veto-proof majorities, and even if Trump were to successfully veto the measure, Biden will be president in only 27 days and can sign it then… although that would create an unfortunate interregnum robbing the economy of critical support during the darkest days of the pandemic,” says Adam Crisafulli, the founder of Vital Knowledge Media, adding that measures in the House to amend the spending and stimulus bill will ultimately prove unsuccessful. “The main fiscal debate occurring in markets isn’t whether the $900 billion will happen but instead if it represents the last major response to the Covid pandemic.”
President Trump blasted the Covid relief package in a video posted to Twitter Tuesday evening, calling it a “disgrace.” He also doubled-down and then followed through Wednesday with a threat to veto a $740 billion defense bill, and now lawmakers are uncertain whether he’ll try to exercise veto authority over the $900 billion stimulus package and its accompanying $2 trillion spending bill as well. “It’s called the Covid relief bill, but it has almost nothing to do with Covid,” President Trump said Tuesday. “I’m asking Congress to amend this bill and increase the ridiculously low $600 to $2,000 or $4,000 for a couple.” The government will shut down if a spending bill is not signed into law by December 28.
$57.3 billion. That’s how much Alibaba cofounder and former executive chairman Jack Ma is worth, according to Forbes. His fortune tanked nearly $4 billion on Thursday alone.
What To Watch For
The U.S. stock market closed Thursday at 1 p.m. EST and reopens Monday for a four-day trading week.
According to analysts at LPL Financial, the year’s final trading week, starting at or around Christmas Eve is the single best week for stocks out of the entire year, on average, ending up nearly 80% of the time. The average gain during the period: 1.3%. “Whether optimism over a coming new year, holiday spending, traders on vacation, institutions squaring up their books before the holidays—or the holiday spirit—the bottom line is that bulls tend to believe in Santa,” says Ryan Detrick, LPL Financial’s chief market strategist.
Democrats Rally Around Trump’s Last Minute Request For $2,000 Checks—Will It Matter? (Forbes)
Trump Vetoes Broadly Supported Defense Bill As He Battles Congress On Multiple Fronts (Forbes)
Another 803,000 Americans Filed For Unemployment Last Week As Trump Threatens Stimulus Hopes (Forbes)
Etsy Stock Surged 340% This Year Thanks Largely To Face Mask Sales, Here’s Why Wall Street Experts Say It Will Keep Rising (Forbes)