The end of the year is restful for investors. Indexes are at their highs, the dollar is at its lows

Despite the ongoing pandemic, the year on the stock exchanges is ending near historic highs. Bullish sentiment has lifted risky assets this year to unexpectedly high valuations on the expectation that vaccinations in 2021 will resume economic growth and boost corporate profits, amid unprecedented stimuli. The MSCI World Global Stock Index ended up growing 14% for the full year of 2020.

Banks and funds representatives see no reason to reverse. The conclusion of the Brexit agreement, the start of vaccinations and economic stimulus programs by central banks without expectations of an increase in interest rates can keep playing on the side of the bulls for a long time. The Fed, in its economic review, provided a projection in which the first rate hike could be only after 2023. Due to the more stable growth of inflation in the US compared to Europe, as well as huge cash injections into the economy, the downtrend in the dollar may continue next year.

Against this background, the benchmark S&P 500 index confidently entrenched above 3700. Many analysts on Wall Street are convinced that there is nothing to prevent stocks from rising next year, and the index can rise above 4000.

Expectations of economic growth are also observed in oil quotes. Brent oil is confidently holding above $ 50 per barrel, WTI is about $ 48. The manufacturing sector of advanced economies is gradually recovering, supporting the demand for black gold.

Major stock indexes are trading as usual and in different directions. The dollar index continues to decline.

S&P 500 (F) 3,717.62 -6.63 (-0,18%)

Dow Jones 30,409.56 +73.89 (+0.24%)

DAX 13,718.78 -42.60 (-0.31%)

FTSE 100 6,443.91 -111.91 (-1.71%)

USD Index 89.517 -0.132 (-0.15%)

Important events:
  • – 04:00 (GMT+2) Manufacturing PMI (Dec);
  • – 16:30 (GMT+2) Number of initial applications for unemployment benefits.

by Justforex, 2020.12.31

We advise you to get acquainted with the daily forecasts for the major currency pairs.

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

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