US Market Review and the week ahead, dollar, Bitcoin, Gold

On Friday four major US indices hit new records, as the S&P 500, Dow Jones Industrial Average, the NASDAQ Composite, and the Russell 2000 each closed at new all-time highs. This is the first time since January 2018 that all four indices made new records on the same day.

However, equities are expected to endure a turbulent week driven by new lockdowns due to rising cases of Covid-19 in the US, although the hopes that a new government stimulus package will boost the US economy will steady ship as well vaccine hopes.

The US set a new daily record on Friday with 228,407 cases of Covid-19 with reports of the number of coronavirus patients admitted to hospitals across the country surpassing 100,000.

California’s state Governor issued stricter stay-at-home orders affecting Southern California and the San Joaquin Valley, as well as the Bay area, which includes San Francisco.

Last, the US Labor Department’s monthly nonfarm payrolls report revealed that jobs growth for November increased less than anticipated, by 245,000, from October, and the unemployment rate slid 0.2% to 6.7%. The participation rate declined as well, indicating that a greater number of Americans are no longer in the labor force.

More ‘stimulus-speak’ came from House Speaker Nancy Pelosi, who insisted “there is momentum” by lawmakers from both sides of the aisle on a $908 billion bill. She said she and Senate Majority Leader Mitch McConnell talked about attaching a stimulus package to an omnibus spending bill the two parties are each ironing out to avoid a government shutdown come on Dec 11.

As stocks soared, investors dumped Treasuries, pushing yields, including for the 10-year note, to their highest levels in nine months according to Investing.com.

The disappointing employment numbers stretched the horizon on the Fed’s all-time low-interest rates, triggering the selloff. Rates were buoyed to 0.973, the highest since Mar.19, along their rising channel.

The dollar extended its decline for the third week in a row, suffering the worst weekly performance in five weeks. If more money is pumped into the economy, the value of the USD would be watered down.

Gold jumped last week, in another twist after it hit its Aug. 8 all-time high.

The precious metal is now back above the 200 DMA and back into a pattern, which means it could retest the top, above 1,900.

Bitcoin rose over the weekend, regaining most of Friday’s 4.1% loss, after nearing the $19,891 all-time high registered on Dec. 12, 2017. Although Bloomberg report projects the digital currency to hit $50,000 in the new year, NYU Stern School of Business Professor Nouriel Roubini believes Bitcoin has no fundamental value and thinks the cryptocurrency’s price is being manipulated.

Oil prices rose on Friday, hitting its highest since early March with Brent crude oil futures rising to just a shy of $50 per barrel as OPEC+ agreed to ease oil-output cuts next year after almost a week of negotiations.

The Week Ahead according to Investing.com

All times listed are EST

Monday

10:00: Canada – Ivey PMI: seen to decline to 51.5 from 54.5, returning toward contraction mode.

18:50: Japan – GDP: expected to surge to 5.0% from -7.9% previously, on a quarterly basis.

Tuesday

5:00: Germany – ZEW Economic Sentiment: forecast to jump to 46.0 from 39.0.

7:00: US – EIA Short-Term Energy Outlook

Wednesday

10:00: US – JOLTs Job Openings: came in at 6.436M in September.

10:00: Canada – BoC Interest Rate Decision: forecast to remain unchanged at 0.25%.

10:30: US – Crude Oil Inventories: expected to show a significant drawdown of -2.358 million from -0.679 million barrels previously.