Brexit and COVID impact markets while Airbnb gets set to list

By Jonathan Jackson. Published at Dec 8, 2020, in Market Wrap

Stocks were impacted last night as COVID-19 infections swept through the US again, putting the fear of further restrictions into investors.

The US down slope may be countered by US senators meeting today to discuss stimulus, with many investors hoping the bill can be pushed through as early as this week.

Market numbers were red across the board as virus numbers crept up and the US prepares sanctions on Chinese officials involved in disqualifying opposition lawmakers in Hong Kong.

According to eToro analyst Adam Vettese, “This seems like a parting blow to China from the Trump administration.”

Meanwhile, the pound pared losses as the UK agreed to further discussions with the European Commission to address the impasse over a trade deal. The FTSE bucked the trend, gaining 0.3%.

The S&P 500 dropped from an all-time high, led by energy and financial companies.

Of the major stocks, Intel Corp. fell when Apple Inc. announced it is planning a series of new Mac processors for introduction as early as 2021.

The S&P/ASX Index closed 0.6 per cent higher at 6675 points on Monday in what was the fifth consecutive session advance for the benchmark.

A gain of 10 points today would push the index above the nine-month high recorded on November 25 and into a positive year-to-date position.

Strong iron ore prices lifted the mining sector, with Fortescue Metals Group adding 3.8 per cent to close $42.39 and BHP added 2.1 per cent to close at $42.39.

Look out for ...

Airbnb has filed its intention to list publicly on 10th December.

This is the most talked-about IPO this year, and investors have the chance to get their hands on Airbnb this week.

Shares are expected to list between $45 and $55.

What to watch ...

According to Vettese we should have our eye on the following this week ...

Coupa Software: California-based tech firm Coupa Software offers business spending management services, which provide companies with visibility into and control over their operations. The firm’s share price has soared in 2020, more than doubling. Coupa’s cloud-based products fit well into the current mass work-from-home environment. Companies facing economic difficulties who want to get a better handle on their expenses also provide another pool of potentially heightened demand. Coupa delivers its latest set of quarterly earnings on Monday, following multiple successive quarters of earnings beats. Currently, 13 Wall Street analysts rate the stock as a buy or overweight, 10 as a hold, and three as a sell.

Smartsheet: Software firm Smartsheet offers collaboration tools for businesses, and has added 37% to its share price in 2020. The company’s market cap now stands at $7.4bn. Smartsheet delivers its third-quarter earnings on Monday, with analysts expecting a loss per share of $0.21 for the quarter. Currently, 11 analysts rate the stock as a buy and five as a hold. Investors will be watching for details of new product rollouts and investments into its existing product set. Analysts at Zacks Equity Research noted that in September the firm received a new authorization for use by government departments, which expands its potential usage by government agencies.

Brexit deadline rapidly approaching: European Union and United Kingdom officials are back at the Brexit negotiating table this week, with an end of year deadline to make a deal before the transition period ends fast approaching. Over the weekend, officials said that the parties remain at odds over three key issues, with a deal unlikely unless those points are ironed out. The outcome of the negotiations doesn’t just have ramifications for the UK’s trade relationship with the EU. US House Speaker Nancy Pelosi has made it clear there is no chance of a US-UK trade deal if a hard border between Ireland and Northern Ireland cannot be prevented. UK shares have been buoyant in recent weeks, but the risks of a Brexit deal not being reached will be brought sharply back into focus as the end of the year approaches.

Tickers

Dow: -0.49%

S&P 500: -0.19%

NASDAQ: +0.45%

FTSE 100: + 0.08%

DAX: - 0.21%

CAC 40: - 0.64%

Asia Dow: - 0.07%

Nikkei 225: - 0.76%

Hang Seng: - 1.23%

ASX 200: + 0.62%

AUD: 0.74


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