European shares opened the last week of 2020 in green following the global shares as finally the UK and the EU reached common ground and signed a deal. Also, the news coming from the U.S. and its stimulus package boosted European investors to go for riskier stocks.
After much drama, Donald Trump signed a $2.3 trillion pandemic aid, restoring the unemployment benefits to millions of Americans.
With European countries launching a mass vaccination drive since yesterday, there seem to be hopes of a global economic normalization in 2021,
In the currency markets, USD will likely remain under pressure against other riskier currencies. The market participants predict that the global economy will recover soon but the USD monetary system policy might remain loose for a more extended period. In the meantime, Gold went up more than 1% and silver, about 3%.
"The U.S. stimulus package will boost the economy and lead to risk-on trades and a weaker dollar, which should support gold," said Tatsufumi Okoshi, a senior commodity strategist at Nomura Securities.
Bitcoin skyrocketed dramatically over the weekend, reaching an all-time high of $28,377, giving the cryptocurrency a total value of beyond $500 billion.
In corporate news, Alibaba experienced a bad day as its shares suffered a sharp selloff of 9%, almost $116 billion, the lowest since June. On Thursday, once Chinese regulators announced an antitrust investigation against Alibaba, the downside move was intensified. Alibaba’s U.S. shares plummeted more than 15% in a single day.
"The antitrust investigation into Alibaba has yet to specify the penalties, which is worrying investors a lot," said Zhang Zihua, a chief investment officer of Beijing Yunyi Asset, the outcome could "greatly change" the company valuations.
Alibaba's shares could be traded even lower in the foreseeable future because of the antitrust suit and any clear decision by the Chinese authorities. But on the positive side, a low price will be attractive for long term investors.