Forex news for North American traders on November 9, 2020
- NASDAQ tumbles into the close. Dow and S&P close higher but near session lows
- Federal Reserve says assets may have a large decline if coronavirus is not contained
- Georgia GOP candidates Perdue and Loeffler say Sec of State should resign
- Pres.Trump's advisor on post-election fight has coronavirus
- US Covid cases come in at 105,142 vs. 93,811 yesterday
- WTI crude oil futures settle at $40.29
- Citi cuts short-term gold target to $1800
- Druckenmiller: I'm looking for a steady 3-4 year decline in the dollar
- US sells 3-year notes at 0.250% vs 0.253% WI
- J.P. Morgan sees S&P at 4000 by early next year
- UK PM Johnson: These are early days on vaccines
- Biden: It's time to end the politicization of mask wearing
- European shares end sharply higher. Up 5 of the last 6 trading days
- Ben Carson tests positive for covid-19 as the White House outbreak continues
- Yellen to Treasury?
- Italy reports 25,271 virus cases vs 22,253 a week ago
- Anything you can do, Russia can do better
- Fauci says Moderna vaccine may have similar results as Pfizer vaccine
- More on Pfizer's covid-19 vaccine
- EU to retaliate this week against US with $4B in tariffs
- The AUD is the strongest and the JPY is the weakest as NA traders enter for the day
Biden was announced as the winner of the US presidential election on Saturday. Then Pfizer announced ahead of the open that their vaccine was 90% effective. Both news stories helped to push the stocks sharply higher with the Dow leading the way. Other beaten up indices like those in Europe were also bid higher.
By the end of the US trading day, the Dow had it's best day since June 5th and all three indices traded at new intraday all record highs, but the closing levels all ended up below the previous all time highs and the Nasdaq index closed down -1.53%. It had been up 1.79% at the highs.
For the Dow, it closed up 2.95% (834.57 points) but was as high as +5.69% (+1610 points) at the session highs. Finally for the S&P, it closed with a gain of 1.17%, but that was off the high of +3.89% (+136.55 points). Yikes.
What happened?
Well, as time went by, there was joy from the virus results, but the reality of the numbers point toward some 50M doses in 2020 and up to 1.3B vaccines by the end of 2021 (for the world). There is the question of FDA approval. Moreover, the Pfizer vaccine required intense negative temperatures to keep the vaccine effective. It also requires two injections per patient. There was not an assurance it would protect those injected indefinitely (would they need another shot 6 months down the line). So, a cure via vaccination is still down the road and not without some logistic questions. So perhaps the great news is still not so great as the world fights a surge in cases and deaths and threats of worse to come.
As far as the election goes, Biden was declared the victor over the weekend, but Pres. Trump is not getting behind or believing the results citing voter fraud. The Republican leadership, led by Mitch McConnell, is not backing down either despite Senate and House candidates doing better than expected (if it was rigged why did those things happen?). With the rhetoric comes the reigniting of the base.
The ploy may be to keep the base hyped up as the Senate is still up for grabs with two Republican runoff elections scheduled for January 5th. McConnell and Co. does not want to be on a downer even if the allegations from Trump prove to be without proof or merit. The election which seemed to be decided over the weekend, may still not be decided because of the dragging out of the results.
So what happened in the forex?
The NZD, CAD and AUD remained the strongest of the majors, and the CHF and JPY fell sharply. That combination is typically "risk on". The USD was mixed/stronger. If there was a problem, should the forex show the opposite?
IN the US debt market, there was a run higher in yields as well which is typically a move out of the safety of the US treasuries (risk on). So it too was not negative.
Nevertheless, with stock market closing relatively weak (at least for the day), the markets are a bit in flux to start the week.
I will feel better when we see what tomorrow brings with all markets being reset to 0.00. Then traders can see the price action and have a better idea what to believe, or follow or trade on going forward.
