November 11, 2020

Stock Futures Higher; Alibaba Smashed Previous Record

Stock Futures Higher; Alibaba Smashed Previous Record

The U.S. and European futures are trading higher again today as investors are picking up the momentum where they left off yesterday. There is still a lot of hope about the potential vaccine by Pfizer, and sector rotation continues. Investors are selling their positions in tech stocks and buying more broader stock market shares, which is a healthy sign for the current stock market rally. 

Single’s Day and Alibaba 

The Chinese e-commerce giant, Alibaba, will remain very much in focus among investors and traders. Annual Single’s day sale has started on a strong footing at Alibaba as consumers have spent more than $56 billion in the first 30 minutes. This number has blown past the previous years’ sales of $38 billion for the first 30 minutes. This shows that consumers’ spending is big, but Alibaba has increased its penetration even further among its customers. Investors will be eagerly watching the final revenue number for Alibaba for the Single’s day. The hope is that the final number will be equally strong as consumers have a lot more options this year, and the frustrations of earlier lockdown may get them to splash more cash.  

Coronavirus Update 

The pandemic situation continues to worsen in the U.S. and in Europe. The number of new cases is still surging in France, Italy and both countries faced the most deaths in one day since April. As for the U.S., the country has reported a record of 142,907 new cases, and it is on track to report the highest number of hospitalisations this week. This situation is keeping investors cautious, and this is one of the reasons that we have seen the U.S. equity market losing some steam. Traders know that if coronavirus cases continue to surge in this particular order, then the policymakers will have no other option but to re-introduce circuit breaker measures. 

Smooth transition 

Traders are concerned about the smooth transition of power as Donald Trump is still persistent with his idea that the election was stolen from him. He still believes that he will win the U.S. elections. President-elect Joe Biden is not getting access to some intel reports that the president-elect usually gets before the inauguration ceremony. Very few Republican leaders have supported Joe Biden, or lets just say they have faith that the transition process will be smooth. Senate Majority Leader Mitch McConnel has downplayed the concerns that the current process adopted by President Trump downplays the significance of democracy in the U.S. The fact that Trump firmly believes that he has won the election gives the indication that the road ahead is going to be full of challenges for investors and traders.   

Brexit 

President-elect Joe Biden has used his first call to send a firm message to Prime Minister Boris Johnson. The message was clear: not to jeopardise the Good Friday agreement. Prime Minister has assured the President-elect that he will not undermine the 1998’s Good Friday agreement. Sterling is continuing its surge against the dollar and the Euro, and the uptrend is likely to remain in place as the U.K. continues to make more progress on Brexit. One of the key reasons that Sterling is performing so well against the Euro is that speculators believe that the European Central Bank will have no other choice but to introduce more dovish monetary policy measures, meaning more stimulus could be on the way. The ECB has previously signalled that it is ready to act should there is any need for more stimulus.   

Commodities 

Oil prices are continuing their upward journey for another day. The U.S. crude inventories shrank by 5.15 million barrels last week. As long as the Crude oil prices continue to trade above $40, bulls are likely to remain confident that the path of least resistance is skewed to the upside. The next meaningful resistance for Crude is at $45.

As for the gold price, the precious metal is still trading above the critical support area of 1850, but the price needs to cross above the 1900 mark in order for it to convince traders that there is more juice left in this trade.