Financial market research and analysis

The US dollar dropped to fresh two-and-a-half year lows on Tuesday, with EUR/USD rising above the widely-watched 1.20 handle.

MARKETS
News
• Stocks in Asia-Pacific were mixed in Wednesday morning trade after major indexes on Wall Street surged to record highs overnight. Bitcoin is down to $18,500;
• Trading of Xiaomi shares in Hong Kong was suspended on Wednesday morning as the Chinese smartphone maker has raised $3.91 billion as part of a deal that includes the largest top-up placement in Hong Kong;
• Australia’s economy expanded 3.3% in the September quarter. That smashed expectations for a 2.6% rise by economists in a Reuters poll;
• JD Health raises $3.48 billion in Hong Kong’s biggest IPO in 2020;
• Singapore and Hong Kong push back their travel bubble again, this time beyond 2020;
• Attorney-general contradicts Trump’s claims of vast conspiracy to rig the presidential vote;
• US senators announce $908bn stimulus proposal: offer rekindles hopes for deal as Fed chairman Jay Powell appeals for more government support;
• Airbnb looks to raise up to $2.5bn in IPO: Home-rentals business sets price range of its float at between $44 and $50 per share;
• CEO Elon Musk warns Tesla employees the stock will be crushed if they don’t control costs. He also says if rival asked for a merger he’d ‘have that conversation’ but wouldn’t do a hostile takeover;
• Nikola shares see another ugly sell-off as insider lockup period expires: a majority of those shares – 91.6 million – are held by Nikola founder Trevor Milton, who resigned as chairman of the company in September. Shares tanked by 15%.

What Else?
• Covid vaccinations in EU unlikely to start before next year: European regulators due to give opinion on Pfizer/BioNTech shot on December 29 and Moderna jab on January 12;
• Ray Dalio: "The United States is at a tipping point that could lead to Revolution or Civil War";
• "Superforecasters" now see 90% odds 200 Million Americans will be vaccinated by October;
• A "Titanic Taper Tantrum"? JPMorgan expects bond demand to tumble by $600BN in 2021;
• BlackBerry spikes record 65% after finalizing deal with Amazon for automotive data software. The software, called IVY, allows automakers to read vehicle sensor data and "create actionable insights" in vehicles and in the cloud;
• Zoom slides 14% as slowing sales-growth forecasts make investors question the stock's 200% post-COVID rally;
• Nio stock gets an upgrade from Goldman Sachs: "In hindsight, we underestimated NIO", Goldman said;
• IBM slides as Amazon "lays groundwork" for own Quantum Computer.

Earnings update
• Salesforce.com shares dropped more than 3% in after hours trading on Tuesday after Salesforce announced it will acquire messaging platform Slack for $27.7 billion. Elsewhere, Salesforce beat on the top and bottom lines of its quarterly results;
• Slack — Shares of Slack rose slightly in extended trading on Tuesday after reporting earnings of one cent per share, compared to the loss of 4 cents per share expected on the Street, according to Refinitiv. Revenue came in at $234 million, topping estimates of $225 million.

Day Ahead
• Earnings: Snowflake; Synopsys; Splunk;
• Macro: US Fed Chair Powell’s testimony for House of Rep, Australia GDP, Japan consumer confidence, Germany retail sales, BoE FPC meeting, Euro area jobless rate, US ADP job report, Fed Beige Book, Euro area ECB non-monetary policy meeting.

Quote of the day
“My wife Mary and I have been married for forty-seven years and not once have we had an argument serious enough to consider divorce; murder, yes, but divorce, never.” – Jack Benny.

WRAP
U.S. stocks jumped on Tuesday with the S&P 500 hitting a new record, as the market’s historic rally extended to December. The Dow climbed 0.6% while tech-heavy Nasdaq Composite gained 1.3%, also notching a record close. Apple popped 3.1% to lead the 30-stock Dow higher. European markets close higher, following global trend. Italian lender UniCredit fell 8% following the announcement that CEO Jean Pierre Mustier will step down in April. Gold and silver rallied while crude oil lost ground amid OPEC uncertainties.
Sentiment got a lift after a group of lawmakers unveiled a $908 billion stimulus plan, which includes more than $200 billion in Paycheck Protection Program small business loans. The news gave stocks a boost, and pushed the 10-year Treasury yield above 0.9%.