U.S. Stocks rise, Gold slumps and Russia has a vaccine?
Gold appears headed for its largest drop in seven years as the S&P 500 climbed for the 8th straight session and the Dow also advanced. The S&P 500 increased by 0.42% to 3,374.74, while the Dow was up over 1% to 303.12. The NASDAQ was off slightly, dipping down by 0.38% to 10,926.42. Global markets moved mainly higher with most European markets up over 2% and the MSCI All-Country World Index gaining 0.7% to a six-month high of 568.73.
Equity markets are reacting to President Donald Trump’s statement that he is “very seriously” considering a capital gains tax cut, as well as an apparent rotation from tech names into stocks that may benefit from the arrival of an effective Covid-19 vaccine. The optimism in relation to a vaccine was started in part by Russian President Vladimir Putin’s claim that Russia had approved the world’s first Covid-19 vaccine. Although Putin’s announcement was met with scepticism, he indicated that one of his daughters had already been inoculated, and some analysts now wonder if the market hasn’t priced in how quickly one or more vaccines might be available.
Twitter & TikTok rumours
Shares of TWTR opened the day at $37.59 before spiking at high as $39.00 as rumours that the company might buy TokTok’s U.S. operations continue. In mid-day trading the shares fell back to $38.00, but traders appear to be giving more credit to the idea of a deal being worked out than expected.
Court rules that Uber & Lyft drivers are employees
A California court has determined that drivers for ridesharing leaders Uber & Lyft should be classified as employees rather than independent workers. The court determined that is was a “bogus argument” that drivers prefer to have the flexibility of being independent from the companies.
Reacting to the judgement California Attorney General Xavier Becerra stated; “What worker doesn’t want to have access to paid sick leave?” and “What worker doesn’t want to have unemployment insurance at a time of Covid-19 crisis? What worker doesn’t want to know that they’ll get paid for overtime if they work 60 hours in a week or 12 hours in a day?”
If the companies expected appeal is unsuccessful the ruling will dramatically increase the cost of the ridesharing business model. Interestingly UBER shares were down close to 1% in afternoon trading, while LYFT was up by 0.84%, indicating that this may be more of a problem for UBER as the larger of the two companies.
Quote of the day: “Other people’s successes are good news – for them and for you. Good for you because the show you a way to go.”Steve Wynn
WYNN: Wynn Resorts increased by over 8% to a high of $88.42, as China will once again provide visas to allow tourists from the mainland to visit Macau. Without Chinese visitors gaming revenue in Macau had fallen by well over 90% in recent months. The reinstatement of visas is a win for Macau and Wynn Resorts.
XAUUSD: Gold dropped by over 5% with the $108 decrease being the most in seven years as investors reacted to news and took profits. Gold ETFs have seen outflows for consecutive days for the first time since early June and recent run may have been excessive. The question will be whether prices rise again after the pullback or if we have seen a top?