US Market Open: Will there be a bullish start to 2021?

US markets are expected to have a mixed start to the last trading day of 2020, capping off a year of strong gains and new record highs, as investors look to 2021 with increasing confidence.

Trading floor 2

US markets book large gains in 2020

The S&P 500 is called to open slightly higher at 3734.5 today from 3733.0 at the end of play yesterday.

The Dow Jones is set to open a smidgen lower at 30417.5 from 30432.0.

US markets will end the year in positive territory, with both indices recently hitting new record highs. The S&P 500 has gained more than 14% in 2020, while the Dow Jones has risen more than 5%.  

Start trading the opportunities with indices today.

European markets have mixed end to the year

European markets have a shorter trading day on New Year’s Eve. Germany is closed while France and the UK are only open for half the day.

France’s CAC 40 was trading 0.4% higher at 5592.0 at midday from 5568.5 at the end of yesterday’s session.

Meanwhile, over the Channel, the FTSE 100 was down 0.4% at 6488.0 from 6516.6 at Wednesday’s close, partly because of a much stronger pound.

European indices have underperformed this year compared to US markets. The CAC 40 has not yet recovered its pandemic-induced losses and trades over 7% lower than the start of 2020, while the FTSE 100 has severely lagged other major indices after losing more than 14%.

Attention turns to US Senate run-offs in Georgia

The latest US stimulus package has dominated headlines in recent weeks. A $2.3 trillion package, including a $900 billion COVID-19 relief package, was approved last week but politicians have continue to argue over certain aspects, such as whether direct payments to citizens should be raised from $600 to $2000.

Republicans in the Senate have essentially killed any hopes of the stimulus bill being changed after attaching the proposal to up payments to other measures that the Democrats do not support. Democrats pushed for more money for citizens after president Donald Trump asked for them to be increased, but most of his fellow Republicans are against the idea because it would cost too much.

With the stimulus bill now largely sorted, attention turns to two Senate run-off races in Georgia. This will see two incumbent Republican Senators face-off against Democrat opponents in a vote on January 5 – a requirement as no candidates secured over 50% of the vote in the November election.

It is a significant vote as it could swing the control of the Senate. Currently, Republicans have a slim majority but, if the Democrats win both seats then it would be an equal 50:50 split between both parties – which would benefit the Democrats as it would give the final say to vice-president Kamala Harris.

Politicians have been keen to tie-up the stimulus bill before the vote to avoid any disruption should the Senate change hands, and the slim timeframe means it is unlikely to be changed beforehand. Still, the dispute over payouts could filter through to the election, with Democrats arguing Republicans have stopped citizens receiving more money while Republicans argue they are being fiscally responsible.

Brexit transition period to end

Four-and-a-half years after voting to leave the EU, the last stage of Brexit will finally take place at 2300 GMT tonight, when the transition period formally ends. UK politicians overwhelmingly backed the Brexit deal struck on December 24 during a vote yesterday, stamping its divorce from the EU into law. EU ambassadors have provisionally accepted the deal and the bloc intends to formally ratify it during January.

Although the deal has tried to minimise disruption, Brexit will bring about huge changes that businesses will have to adapt to. The UK is leaving the Single Market and Customs Union, and many sectors – such as financial services – remain largely uncovered by the new deal.

Coronavirus: how quickly can economies recover in 2021?

Much of the uncertainty that has plagued the market this year, whether it be Brexit, the latest US stimulus package or tensions between the US and China, is disappearing as we enter 2021. Brexit is sorted, the latest US stimulus package is largely done and dusted, and relations between the world’s two biggest economies is expected to improve when Joe Biden becomes president on January 20.

The one major unknown heading into 2021 is how quickly the global economy will be able to recover from the coronavirus pandemic. Confidence has grown as vaccines are rolled-out and because central banks remain committed to accommodating a recovery, but surging cases and hospitalisations show we are not yet out of the woods.

City Index analyst Joe Perry has a look at what the roll-out of vaccines could mean for markets next year.

Forex: GBP/USD ends year at record high

GBP/USD traded 0.2% higher at 1.36457 at midday from 1.36246 at the close of trade on Wednesday – its highest level since May 2018.

Meanwhile, the pound also rallied against the euro, with EUR/GBP down 0.4% at 0.89940 after ending yesterday at 0.90263.

EUR/USD was broadly flat at 1.22754 at midday from 1.22973.

Start trading the opportunities in the forex market today.


Commodities: Oil prices slip lower

Brent was trading 0.8% lower at $51.08 at midday from $51.48 at the close yesterday, while WTI followed lower to $47.96 from $48.34.

The EIA natural gas storage change, providing an insight into US stockpiles, is scheduled at 1700 GMT today.

Start trading the volatility in oil prices today.

Gold was trading flat at midday at $1894.

Start trading gold and other precious metals today.

Market-moving events in the economic calendar

The headline event in the economic calendar today is due at 1330 GMT, when US initial and continuing jobless claims will be released.

You can view all the scheduled events for today using our economic calendar, and keep up to date with the latest market news and analysis here.

More from Indices


This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit for the complete Risk Disclosure Statement.