Stimulus, Copper Hits Highest Level, Stocks to Open Flat

The never-ending quest for a U.S. stimulus package extends into the weekend. Disagreements over end-dates for some Federal Reserve lending programs on Thursday held up negotiations on Capitol Hill.

To keep the talks going to their expected completion, Congress has to pass a stopgap bill on extending the government’s funding. 

Senate Leader Mitch McConnell was quoted as saying after Thursday’s negotiations, they’re going to stay right here until they’re finished. Even if that means working through the weekend, which is highly likely, he added.

The package reportedly includes direct checks of $600 million and an extension to the enhancement of unemployment benefits. That’s an issue that has gained importance after two straight weeks of sharp increases in initial jobless claims.

Copper Hits Highest Level in almost 8 years

Prices of crude oil have cooled a little overnight. The rally in the rest of the industrial commodity complex, however, continues unabated.

For the first time since January 2013, copper futures topped $8,000 a ton in London overnight. It has become a bet on heavy investment in renewable energy technologies, from electric vehicles to offshore wind farms.

For the metal, the spread of EVs has developed particular importance. Given that every car manufactured requires four times as much copper as a car with an internal combustion engine. Trafigura, a commodities trader, estimates world copper demand will grow by some 44% over the next decade.

Stocks Set to Open Flat

Ahead of the ‘quadruple witching’ today, U.S. stocks are set to open mixed. December options contracts on stocks, indices and other products are all expiring.

Dow Jones, S&P 500 and NASDAQ futures were all essentially flat by 6:30 AM ET. None moved more than 0.1%.

Stocks to likely be in focus later include FedEx which is indicated down 3%. That’s despite reporting a bumper quarter that underlined the scale of the online shopping boom after the bell on Thursday.

Nike, Darden Restaurants and cruise operator, Carnival, report earnings in the course of the day.

EU Data Better than Expected

Meanwhile, European data again suggested that the economic impact of the latest lockdown may not be as bad as feared.  

The closely monitored German Ifo business climate index unexpectedly rose to 92.1 from an upwardly revised 90.9 last month. It defies expectations for another drop. 

This corroborated an earlier positive surprise this week from IHS Markit’s purchasing manager indices. Producer prices in Germany for November also came in higher than expected. This suggests that companies in Europe’s largest economy had regained some pricing power despite the slowdown.