S&P500

The US stock indices dropped, but they are still hovering near this year highs.

On Thursday, the US main stock index declined, remaining near its yearly highs. Investors expect a further rise. On Wednesday, the Dow Jones Industrial Average closed with the loss of 0.6%, the NASDAQ Composite and the S&P500 dropped by 0.3%.

On Thursday, Asian stock indices also fell. Thus, China's index decreased by 0.7%, whereas Japan's index slid by 0.3%.

Energy

Oil prices slumped by $2. In particular, Brent crude dropped below $80 to $79.90 per barrel.

Global epidemiological situation.

The number of new virus cases is constantly rising, thus proving the beginning of the fourth wave. Yesterday, the number of new cases jumped by 600 thousand, reaching the highest level since the middle of September. The US reported more than 100 thousand new cases in 24 hours. In Germany, the indicator added 60 thousand, whereas in the UK, it jumped by 38 thousand.

The new coronavirus wave may hit the economic growth in the US and the EU, thus affecting the stock market.

The S&P500 is trading at 4,688, the range is 4,650-4,710.

According to the reports published yesterday, the US housing starts failed to rise and hit the reading of 1,520 thousand on a yearly basis. The number of building permits increased to 1,650 thousand from 1,586 thousand in the previous month. The boom in the real estate market is mainly supported by savings and cash. The MBA mortgage applications declined by 2.8% in November.

Earlier, the US reported that its industrial production grew by 1.6% in October, exceeding the forecast. In September, the indicator dropped. The capacity utilization rate also advanced to 76.4% from 75.2%.

Oil experts have calculated that the cost of oil for new projects is now about $47 per barrel. This is 8% lower than in 2020 and 40% lower than in 2014. This means that the current oil prices, about $75-80, are very profitable for expanding oil production.

Biden demanded that the Federal Trade Commission (FDA) check oil and gas companies for deliberate overpricing in the US domestic market. This was made in an attempt to resist the rapidly rising inflation.

Tesla and Toyota have launched a campaign against Biden's $12,500 tax credit for the purchase of electric vehicles. The fact is that Biden made an important amendment. Now, only those who buy electric cars made at factories that have contracts with trade unions will receive a full benefit. Notably, batteries should also be manufactured in the United States. If a buyer fails to meet these conditions, the benefit will be reduced by almost 10 times.

USDX is trading at 95.80, the range is 95.50 - 96.20. The US dollar index stopped climbing, but it is trading near its yearly highs amid expectations that the Fed will take measures to curb the surging inflation. The euro also stopped falling against the US dollar and now it is trading around 1.1320. Although in the previous days, the euro slumped, it failed to rebound. It means that the currency may continue falling.

USD/CAD is trading at 1.2610, the range is 1.2550-1.2650

The USD/CAD pair managed to upwardly reverse and reach fresh highs. The surge was boosted by a slump in oil prices. The pair is likely to go on gaining in value.

Conclusion:

The US stock indices are likely to reach new highs in the near future. However, after that, the pair is highly likely to drop. It is rather risky to open sell positions amid a rise, but buy orders may also lead to losses.