U.S. stock-index futures traded mixed on Wednesday, as hopes for economic recovery, supported by a rollout of effective COVID-19 vaccines, and progress in fiscal stimulus talks between Democrats and Republicans boosted demand for economically sensitive stocks such as banks and industrials.

Global Stocks:

FXStreet notes that the S&P 500 maintains its break above key trend resistance from February and analysts at Credit Suisse maintain a bullish outlook with resistance seen next at 3720/25, then 3765/85.

“The S&P 500 continues its steady push higher and with the 3700 psychological barrier cleared we maintain our immediate bullish bias with resistance seen next at 3720/25, which we look to cap at first. Above in due course though should see what we look to be a tougher test of a cluster of Fibonacci projection levels in the 3765/85 band, from which we would look for a fresh consolidation phase. Big picture though, we continue to eventually look for the ‘measured triangle objective’ at 3900.” 

“Our main concerns remain the ‘euphoric’ state of the rally – 91% S&P 500 stocks are above their 200-day average (a level not seen since 2013) and the market is well above the upper end of what we see as its ‘typical’ extreme (15% above its 200-day average) – but these on their own do not for now prohibit us looking for further gains.” 

(company / ticker / price / change ($/%) / volume)

Walt Disney (DIS) initiated with an Overweight at KeyBanc Capital Markets; target $177

Chevron (CVX) target raised to $95 from $88 at Cowen 

American Express (AXP) downgraded to Hold from Buy at DZ Bank; target $128

Walt Disney (DIS) upgraded to Overweight from Equal Weight at Wells Fargo; target raised to $182

FXStreet notes that the MSCI All Country World Index returned 12.2% in November, its best-ever monthly performance and has gained a further 2.4% in December so far. Economists at UBS see further upside based on widespread vaccine availability in 2Q21, a broadening of the economic recovery, additional US fiscal stimulus and continued global monetary policy support. 

“Equities can rally further and that investors should look through the near-term uncertainty created by rising case numbers and hospitalizations. Our view is based on widespread vaccine availability in 2Q21 allowing an easing of restrictions and a broadening of economic recovery, additional US fiscal stimulus and continued global monetary policy support.”

“Rollout of the Pfizer/BioNTech vaccine begins in the UK this week. The US Food and Drug Administration also meets this week to discuss an Emergency Use Authorization of the Pfizer/BioNTech vaccine and Vice President Mike Pence has said that distribution could begin next week. On 17 December, the FDA meets again to discuss Emergency Use Authorization for the Moderna vaccine.”

“US fiscal talks appear to be making progress on a USD908 B bipartisan stimulus package, according to press reports. Hopes for a deal before January were raised on Friday as weaker-than-expected non-farm payroll data prompted a rally in both US equities and yields. Investors appear to be taking the view that slowing labor market momentum may provide a catalyst for dealmakers to reach an agreement.”