S&P 500 Futures print mild losses as virus woes, US-China tension probe bulls near record top

• S&P 500 Futures recede from all-time high while keeping 3,700.
• Japanese government mulls emergency, US-China jostles over NYSE delisting.
• US paycheck discussions, early-month activity numbers are in focus.

Having refreshed the all-time high to 3,753 during the last week, S&P 500 Futures drop to 3,743, down 0.15% intraday, amid Monday’s Asian trading. While consolidation is the best term to describe the latest decline in the risk barometer, chatters over the coronavirus (COVID-19), coupled with tussles between the US and China, also weigh on the market sentiment.

Having witnessed a jump in the covid numbers off-late, the Japanese government is seeking expert advice on whether to declare a state of emergency in Tokyo and neighboring prefectures. Not only in Japan but the virus woes are also gaining momentum in the UK where the National Health Services (NHS) stepped back from committing to deliver two million COVID-19 jabs a week.

On the other hand, rumors also swirled that the US eyes delisting of more Chinese companies, which in turn pushes Chinese securities regulator to say that New York Stock Exchange (NYSE) plans to delist three Chinese telecom firms are “political” and that the impact will be “limited”.

It should be noted that geopolitical threats from Iran, as cited by the US and Dubai recently, also challenge the risks amid a lack of major events.

Alternatively, upbeat prints of Asian activity numbers from Japan, South Korea, Taiwan and Indonesia for December favor the bulls. Also, the US policymakers’ push towards a $2,000 paycheck gets an additional strength as Nancy Pelosi remains as the US House Speaker. The same backs the stimulus hopes and test the bears as well.

Looking forward, China’s Caixin Manufacturing PMI for December, expected to reprint 54.9, can offer immediate direction to markets while second readings of monthly PMIs from Europe, the UK and the US can decorate the calendar afterward. It should, however, be noted that chatters surrounding US stimulus and Sino-American tension may also gain attention and will direct near-term market moves.

Read: S&P 500 Price Forecast 2021: Optimism is not inappropriate as bulls could enjoy another 15% winning year