U.S. Stock Market

Stocks Retreat As Traders Take Profits After November Rally

A Busy Week Ahead

S&P 500 futures are losing ground in premarket trading as investors wait for new catalysts which could push stocks to new highs.

November was a great month for stocks so some traders and investors prefer to take some profits off the table near record highs.

The economic calendar is busy this week, and current market optimism will soon get tested by many economic reports. Today, the U.S. will release Pending Home SalesĀ report which is expected to show that Pending Home Sales increased by 1% month-over-month in October.

This report will be followed by Manufacturing PMI report for November which will be published on Tuesday. Traders’ attention will shift to the job market on Wednesday when the U.S. will release ADP Employment Change report. Initial Jobless Claims report will be published on Thursday, followed by Non Farm Payrolls and Unemployment Rate reports on Friday.

Job market reports will likely have a significant impact on the market as they will indicate whether the economy continues to rebound despite the second wave of coronavirus.

U.S. Dollar Falls To New Lows

The U.S. Dollar Index managed to get below the support at the yearly lows at 91.75 and continues to move lower.

The U.S. dollar is under pressure as traders bet that Biden presidency will bring a huge stimulus package while the Fed will keep rates at the bottom for years.

The weak dollar may provide an additional boost for U.S. stocks and commodities. At this point, the main beneficiary of U.S. dollar’s weakness is copper which has managed to get to levels not seen since early 2013.

Interestingly, gold and silver remain under pressure despite the weak dollar as demand for safe haven assets decreased due to recovery hopes.

OPEC+ Begins Two-Day Negotiations

OPEC+ members will have two days to discuss their next move. At this point, the market expects that OPEC+ will extend current production cuts for the first three months of 2021. However, recent reports suggested that OPEC+ is also discussing a gradual increase of production.

WTI oil has recently made an attempt to settle below the psychologically important $45 level but failed to gain downside momentum. Oil will likely be very volatile in the upcoming trading sessions as traders wait for OPEC+ decision.

Meanwhile, oil-related stocks look ready to move lower at the start of today’s trading session as traders continue to take their profits after a massive rally in November.

For a look at all of today’s economic events, check out our economic calendar.