Stocks fizzle on stimulus doubts, DoorDash robust debut, no changes from BOC, Brexit dinner

US equities in choppy waters

The New York session started with fresh record highs as investors initially focused on the resumption of the cyclical rotation trade, incremental optimism that Washington DC is actively negotiating a holiday stimulus bill, and some signs that the Thanksgiving COVID surge may not be as bad as feared.  The S&P 500 and Russell 2000 hit made fresh intraday highs; however, the conviction behind the rally was waning.  The success of the unicorn IPO parade will likely determine if stocks can get their groove back and continue this run to uncharted territory.

US stocks turned negative after Senate Majority McConnell maintained his grinch status after complaining that the Democrats are moving the goalposts with the aid bill.  McConnell is not yet showing any signs of delivering an olive branch to Democrats.  The White House and many Republicans want to get a deal done, so it might be a matter of a few more days before McConnell pivots. Until a breakthrough is made on the next fiscal aid bill, stocks could remain choppy.

DoorDash IPO impresses markets

The IPO for DoorDash was priced at USD102 and delivered a strong open at USD182.  DoorDash is the perfect COVID trade that is happening right as many large cities brace for further lockdowns, likely boosting the demand for takeout delivery services.  However, some investors may choose to be optimistic for the return to pre-pandemic life due to vaccine breakthroughs and have a downbeat assessment for long-term value.  DoorDash is unique in offering a reliable online platform for businesses that have struggled to compete with mega-cap tech giants.

Bank of Canada holds the course

The Bank of Canada rate decision went as planned with rates remaining at record lows and QE staying at least the USD4 billion per week.  The recovery is slowing down and that will get worse as new waves of infections occur.  The Canadian dollar strengthened modestly following the policy meeting, but has pared most of its gains as the dollar stages a broad-based rebound.

Brexit Dinner

It is crunch time for Brexit negotiations and expectations are high for the dinner between UK PM Johnson and EU Commission President von der Leyen to show talks are headed in the direction.  The risks of no-deal Brexit are growing but the consensus remains mostly optimistic that a deal will get done.  Talks have been at a deadlock and some progress needs to emerge for the British pound to remain supported.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Ed Moya

Ed Moya

Senior Market Analyst, The Americas at OANDA
With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
Ed Moya