U.S. stocks fell on Friday as the market digested the decision of the Ministry of finance to end several emergency loan programs. By the end of the day, the Dow fell 219.8 points, or 0.8%, to 29263.5; the S & P 500 index closed at 3557.5, down 24.3 points, or 0.7%; the NASDAQ fell 49.7 points, or 0.4%, to 11855.0.
Pfizer and biontech submit vaccine emergency use authorization to FDA
According to the real-time statistics of Johns Hopkins University, 188000 cases were confirmed in the United States every day on Thursday. In order to control the spread of the virus, more stringent epidemic prevention and control measures have been intensively adopted by the States, even in partial blockade.
Tourism stocks were under pressure, Carnival Cruise fell 4.5%, Boeing closed down 2.9%, the worst performing Dow component stocks, American Airlines and United Airlines both fell more than two percentage points. Vaccine stocks strengthened, Pfizer and biontech closed up 1.4% and 9.6% respectively. The two companies will apply to the U.S. Food and Drug Administration (FDA) for emergency use authorization of new coronal vaccines on Friday. Experts from the FDA advisory committee are scheduled to meet on December 8-10 for discussion. It is expected that the review process will take several weeks. Once the vaccine is approved, it will be distributed to the public in stages, and the front-line medical staff, the elderly and patients with basic diseases will take the lead.
In summary, investors weighed the short-term and severe situation of the epidemic situation and the long-term benefits of vaccines. Both the Dow and the S & P 500 index fell 0.7% and the Na index rose 0.2% weekly.
The U.S. Treasury ended several emergency loan programs, and Mr. mnuchin said there was enough ammunition
The market also focused on the differences between the US Treasury and the Federal Reserve on whether to extend some emergency loan programs. Finance minister mnuchin announced on Thursday that loan instruments including corporate credit, municipal loan and main street loan plan will not be renewed after they mature on December 31. When the epidemic hit the United States in late March, the Ministry of Finance authorized the Federal Reserve to provide credit guarantee for corporate and local debts and inject liquidity into the financial market, with a capital scale of $4.5 trillion. In an interview with foreign media CNBC before trading on Friday, mnuchin said that it was the intention of Congress to withdraw some emergency tools at the end of the year. The above emergency loan plan is effective and there is no need to buy more corporate bonds. The Ministry of finance still has 800 billion US dollars of ammunition. If necessary in the future, the Ministry of finance has enough funds at its disposal to support the financing needs. Financial markets need not worry, he said. Despite disagreements between the Treasury and the Fed on the above issues, Mr. mnuchin said he and Powell remained in close working contact.
Chicago Fed chairman Charles Evans expressed his disappointment at the Treasurys decision on Friday, when the market is facing challenges, emergency lending tools play an important supporting role and will remain important for a long time. He pointed out that the spread of the virus has intensified in the United States, and economic recovery needs more policy support.
Jeffery gundlach, the new bond king and CEO of dual line capital, said several loan instruments called off by the Ministry of finance supported the market this spring. He questioned whether the market could remain stable in the future without these tools. Krishna Guha, vice chairman of evercoreisi investment bank, pointed out in a report that it has always been very difficult to exit stimulus measures. The key is when to withdraw from stimulus measures, which will not make market risk return. He believes that Mr. mnuchins move is to tighten the financial environment at the wrong time. If the market situation deteriorates, it may also deprive some enterprises and governments of the opportunity to obtain low-cost credit.
J.P. Morgan expects U.S. economy to shrink 1% in the first quarter of next year
J.P. Morgan economists believe that the U.S. economy will shrink again in the first quarter of next year, becoming the first big Wall Street firm to predict economic regression. The bank predicts that GDP will regress by 1% in the first quarter of next year. At that time, the government will launch a fiscal stimulus with a scale of US $1 trillion, and the positive progress of vaccines will push GDP rebound by 4.5% and 6.5% in the second and third quarters respectively. European stocks and crude oil, the main European stock index rose on Friday. The pan European Stoxx 600 index rose 0.5% to 389.6; the FTSE 100 rose 17.1, or 0.3%, to 6351.5; Germanys DAX index rose 51.1, or 0.4%, to 13137.3; Frances CAC40 index rose 21.2, or 0.4%, to 5495.9. In terms of commodities, WTI crude oil futures rose 42 cents, or 1.0%, to 42.15 US dollars / barrel, with a cumulative weekly increase of more than 5%; Brent crude oil futures rose 59 cents, or 1.3%, to 44.79 US dollars / barrel, with a weekly increase of more than 4%. Source: Wang Xiaowu, editor in charge of Finance and Economics_ NF
J.P. Morgan economists believe that the U.S. economy will shrink again in the first quarter of next year, becoming the first big Wall Street firm to predict economic regression. The bank predicts that GDP will regress by 1% in the first quarter of next year. At that time, the government will launch a fiscal stimulus with a scale of US $1 trillion, and the positive progress of vaccines will push GDP rebound by 4.5% and 6.5% in the second and third quarters respectively.
In terms of commodities, WTI crude oil futures rose 42 cents, or 1.0%, to 42.15 US dollars / barrel, with a cumulative weekly increase of more than 5%; Brent crude oil futures rose 59 cents, or 1.3%, to 44.79 US dollars / barrel, with a weekly increase of more than 4%.