US OPEN: Virus fears overshadow US stimulus

• New, highly contagious strain of COVID-19 was found in the UK
• US lawmakers finally approved a $900 billion relief package
• Tesla stock falls nearly 5% in first day of trading on the S&P500

US indices launched today’s session lower as enthusiasm over a coronavirus stimulus deal was overshadowed by news that new more infectious Covid-19 strain appeared in the U.K. There is no information yet to suggest that it is any more virulent than the initial strain, or that the vaccines either already approved or in development will be any less effective against it. Meanwhile, Senate majority leader Mitch McConnell said an agreement had been reached by congressional leaders on a roughly $900 billion COVID-19 relief bill. The bill includes direct payments of $600 to all Americans, $300 per week in unemployment benefits through March and $284 billion for the Paycheck Protection Program. The House and Senate are set to vote on it on Monday.

US100 - futures on three main US stock market indexes turned negative in early European trading hours. US100 fell more than 1% but declines were halted by the key support at $12,500. Index broke above the 50 SMA (green line) and has been increasing since. If buyers manage to uphold momentum then upward impulse towards resistance at 12,669 pts could be launched. On the other side, should the price break below the aforementioned support level, declines could deepen. In such a scenario, the 12,400 pts handle could be the first target for market bears, however much stronger support lies at 12,210 pts level. Source: xStation5

Tesla (TSLA.US) officially joined the S&P 500 today after the company posted five consecutive profitable quarters amid heightened demand for electric vehicles. Tesla’s stock jumped over 730% this year. The electric car maker will have a 1.69% weighting in the index, the fifth largest. It will be the sixth biggest company in the large-cap benchmark when counting the share classes of Alphabet together. 

Tesla (TSLA.US) shares fell 6% in premarket trade, in what looks like profit-taking now that the big trade of the year – retail investors anticipation of forced buying by passive institutional accounts – is effectively completed. Stock is currently trading near the ATH at $686.05 which coincides with the upper limit of the upward channel. If sellers will manage to uphold momentum and break below the support at $600.00 then declines could deepen. Source: xStation5

Travel-related stocks came under pressure as investors fear that new coronavirus strain in the U.K., may trigger more severe lockdowns and travel restrictions. Norwegian (NCLH.US) and Royal Caribbean (RCL.US) cruise lines shares each plunged more than 9% in premarket trading while Delta Air Lines (DAL.US) fell 8%. Shares of companies which would suffer from the stricter lockdown measures also fell, including Wynn Resorts (WYNN.US) and Gap (GPS.US).

Moderna (MRNA.US) stock rose 1% in premarket after its Covid-19 vaccine received U.S. Food and Drug Administration approval late Friday.

Apple (AAPL.US) decided to temporarily shut down all of its stores in California, due to a spike in coronavirus infections.

JPMorgan Chase (JPM.US) announced a $30 billion stock buyback, shortly after the Federal Reserve said it would allow banks to restart buybacks during the first quarter of 2021. The shares gained 4% in premarket trading as of 7:45 a.m. ET.

Walmart (WMT.US)  was upgraded to “outperform” from “sector perform” at RBC Capital Markets, which believes that the retailer is well-positioned to handle a range of different economic scenarios in 2021.

FactSet (FDS.US) reported quarterly earnings of $2.88 per share, above analysts’ expectations of $2.75 per share. Revenue also beat market estimates. The financial information provider saw improved results in its analytics unit as well as its content and technology operations.