© Reuters
By Noreen Burke
Investing.com – It is the last full week for the markets before the Christmas holidays and is expected to be packed. The first doses of the US COVID-19 vaccine campaign will be administered on Monday as the pandemic spreads across the country. In Washington, Congress is still stuck on a pandemic stimulus package as the Federal Reserve prepares to hold its last meeting of the year. Tesla is finally ready to join the S&P 500 just before the market close on Friday. Meanwhile, Brexit talks are up to the last minute and if no deal is reached by Thursday, the final 2020 Bank of England meeting will be a mandatory event. This is what you need to know to start your week.
- US COVID Vaccine Campaign Launches
The first doses of the vaccine developed by Pfizer (NYSE 🙂 and German partner BioNTech SE (NASDAQ 🙂 will be delivered to 145 locations in the United States on Monday, marking a turning point in the pandemic that has killed more than 295,000 Americans.
Infections, hospitalizations and deaths are skyrocketing to record levels in the US, which has been unable to mount a coordinated effort to curb the spread of the virus.
Healthcare workers and older people in long-term care facilities are expected to be the main recipients of a first round of 2.9 million doses.
Millions of Americans could start getting vaccinated this month, especially if a second vaccine Modern (NASDAQ 🙂 quickly approved. Other companies with vaccines in advanced development include AstraZeneca (NASDAQ 🙂 with the University of Oxford and Johnson & Johnson (NYSE :).
- Stimulus deadlock
Investors are eager to know if more fiscal stimulus is ahead, as mounting virus cases lead to new containment measures and company closings in many US states.
But Congress missed another deadline on Friday to deliver a new fiscal aid package to help jumpstart the economy. Instead, the Senate approved a tentative extension of government funding to give lawmakers more time to craft a larger spending package, including coronavirus relief.
A deal remains elusive after a months-long confrontation between Republicans and Democrats over the size of the potential package. More than 13 million people will lose unemployment benefits on December 26 without swift action from Congress.
- Fed meeting
The Fed will maintain its final 2020 monetary policy in the context of a faltering economic recovery.
The November US employment report signaled a loss of momentum in the labor market and the latest jobless claims data hit the highest level since September amid new containment measures to slow the spread of the virus.
That may lead policymakers to debate making changes to the bank’s asset purchase program or altering its forward orientation for future purchases, particularly as Congress remains stuck on additional fiscal stimulus.
- Tesla to join the S&P 500
Tesla joins Friday and investors anticipate an epic trade of more than $ 50 billion in stock from electric carmakers in the minutes leading up to the close, as index funds adjust holdings to match the index adjustment of reference.
Adding Tesla to Wall Street’s most followed benchmark will force index funds to buy its shares, while also selling shares of other components of the S&P 500.
Tesla’s market value stands at around $ 600 billion and its shares are up 600% so far this year.
Shares of Tesla (NASDAQ 🙂 have risen 50% since November, when its debut on the index was announced. It is the world’s most valuable auto company, despite having production that is only a fraction of its rivals Toyota, Volkswagen (DE 🙂 and General Motors (NYSE :).
Active funds, many of which have avoided Tesla, must now decide how much to own, if any. Portfolio managers have been seeking advice from JPMorgan analyst Ryan Brinkman. Your sight? Tesla is “dramatically” overpriced.
- Brexit and the Bank of England
The Brexit talks entered overtime on Sunday, with Britain’s chaotic no-deal exit from the European Union as the transition period ends on Dec. 31 looking increasingly likely.
Prime Minister Boris Johnson has said there is “a great chance” that Britain and the EU will not reach a trade deal.
No deal by Thursday would mean the Bank of England will have to focus on increased risks to the economy and possibly open the doors to more stimulus and subzero interest rates.
When Bank of England lawmakers announced a £ 150bn increase in stimulus last month, they probably did not anticipate acting again anytime soon.
–Reuters contributed to this report.