US stocks expected to make a tentative start on Friday as traders await the outcome of stimulus negotiations

US markets are expected to make a tentative start on Friday as traders await the outcome of negotiations over the US$900bn coronavirus (COVID-19) fiscal stimulus bill. The Dow Jones Industrials Average was expected to open just 13 points higher at 30,316 while the S&P 500 is on course to edge 3 points higher to 3,725. But the Nasdaq Composite was seen opening 9 points lower at 12,753. “Investors are willing to believe that more fiscal stimulus will arrive; it’s just a matter of ‘when’, not ‘if’. The current state of the US economy clearly warrants more financial support. Thursday’s initial jobless claims were worse than expected, while US consumers evidently reined in their spending in November. The pandemic is still claiming lives at an alarming rate and the total number of US Covid-19 cases has now exceeded 17 million,” said Han Tan, a market analyst at FXTM. “The fresh injection of government funds into the economy would serve as justification for the already-lofty valuations in US equities. The longer risk assets are made to wait, the bigger the concern of a pullback as fiscal stimulus ‘fatigue’ sets in,” the FXTM analyst suggested. On the subject of US COVID-19 cases, there were 223,000 new cases reported yesterday but stripping out the surge in cases in California, US cases fell by 7.9% from a week earlier, said Ian Shepherdson at Pantheon Macroeconomics. “Test positivity remains elevated, but it has peaked, and we expect to see a modest but clear decline over the next few days before the holidays throw the numbers into chaos again. The positivity rate clearly was pushed higher by travel and socialising over Thanksgiving, and another increase in early January is a good bet,” Shepherdson postulated. In the US stock market, media group Vivendi could be in focus after it said it would sell off another tenth of its subsidiary Universal Music Group to consortium spearhead by Chinese holding company Tencent. As for US macroeconomic data, economists are bracing themselves for current account data for the third quarter to reveal the largest deficit since the gloomy days of the credit crunch in 2008. On the other hand, the Conference Board’s Leading Indicator for November is expected to post a seventh consecutive month of expansion. “Neither report is likely to move markets, leaving investors focused on any signs of progress in negotiations to agree a fiscal stimulus package that would be acceptable to Congress,” said Daiwa Capital Markets. Five things to watch on Friday: Tesla’s grand entrance into the S&P 500 from next Monday is expected to be preceded by a huge trade, with an unprecedented $80 billion of the electric car maker’s stock changing hands by the end of the session on Friday. Microsoft Corp said on Thursday it found malicious software in its systems related to a massive hacking campaign disclosed by U.S. officials this week, adding a top technology target to a growing list of attacked government agencies. Google faced its third major lawsuit in two months on Thursday as 38 U.S. states and territories accused the $1 trillion company of abusing its market power to try to make its search engine as dominant inside cars, TVs and speakers as it is in phones. US  banks would have no longer than 36 hours after finding a cybersecurity breach to flag the issue to their regulators, under a new rule proposed Friday by US banking regulators which would direct banks to notify their primary regulator as soon as possible after a breach is discovered that could impair services or the organization itself. In addition, the rule would direct third-party service providers to promptly tell client banks of any breaches that would impair their services. The chief executive of United Launch Alliance (ULA), a joint rocket venture between Boeing Co and Lockheed Martin Corp, said it expects to receive two new rocket engines from billionaire Jeff Bezos’ Blue Origin by next summer.