US markets look set for subdued return to a full day's trading after Thanksgiving and Black Friday

US markets look set to return to a full day's trading after Thanksgiving and Black Friday in a fairly subdued mood. Stock indices have had one of their best months in decades – dating back to January 1987 in the case of the Dow Jones Industrials Average – so there could be some profit-banking going on. Spread betting quotes point to the Dow opening 166 points lower at 29,744 while the S&P 500 is expected to shed 11 points at 3,627. However, as is often the way, the tech-heavy Nasdaq Composite is seen following its own script, and is expected to open 59 points firmer at 12,264. “Crude prices have been hit in early trade, as weekend OPEC negotiations hint at a somewhat less one-sided debate than many had hoped for,” said Josh Mahony at IG, after West Texas Intermediate slipped 57 cents lower to US$44.96 a barrel. “Recent vaccine announcements have helped lift hopes of a sharp rebound in demand for crude, yet the question now is how much energy should be priced based on the future prospective demand or current reality. From an OPEC perspective, the question is whether foster this recovery or send energy prices lower once again. The two-million barrels per day increase that would come in the absence of a deal would deal a serious blow to market sentiment as much as supply/demand levels themselves, indicating that the group are unwilling to support energy prices until demand returns,” Mahony said. Talking of vaccine announcements and the coronavirus pandemic, Moderna Inc, one of the companies that has developed a vaccine that has shown very high efficacy (94.1%) in tests, is to file for emergency use authorisation from the US Food and Drug Administration. The company added that it is still running tests on the vaccine and there have been no safety concerns identified as of yet. Meanwhile, it is going to be a tense few days in the US as medical professionals wait to see whether there is a post-Thanksgiving surge in cases. There was a decline in new cases over the Thanksgiving holiday but in the opinion of Ian Shepherdson at Pantheon Macroeconomics, “this means nothing” as reporting schedules were sketchy over the long weekend. “It is clear, though, that cases were peaking just before Thanksgiving, and likely would now be starting to fall. But we have to assume that the movement of millions of people around the country, and the associated family gatherings, will prompt a temporary increase in cases,” Shepherdson warned. “It's impossible to know how big the Thanksgiving spike will be, but the experience of the UK and Israel, where the second national lockdowns were pre-announced, suggests that a single weekend of increased socialisation — never mind a surge in travel activity — can make a substantial difference to the case trajectory for a couple weeks or more. The danger period is from the end of this week through the end of next week, allowing for the usual lag between infection, symptoms, and testing,” Shepherdson said. In the economics diary in the US today we have the Chicago Purchasing Managers’ Index (PMI) and Dallas Fed manufacturing indices for November, together with the pending home sales report for October.