• S&P 500 Futures fails to extend the previous day’s pullback from record top.
• Chatters surrounding US President Trump’s impeachment, covid stimulus entertain markets.
• Fed policymakers remain cautiously optimistic even as virus spreads.

S&P 5000 Futures seesaw around 3,795-3,800, up 0.12% intraday during early Tuesday. The risk barometer stepped back from the all-time high on Monday. While uncertainty over US President Donald Trump’s reign joins the coronavirus (COVID-19) woes to weigh on risks, hopes of the US fiscal stimulus and recently cautious optimistic comments from the Fed policymakers favor risks.

Although Republicans managed to turn down the Democratic Party-led first attempt to impeach US President Donald Trump, Joe Biden and company stays ready to put the proposal once more to oust the Republican leader. Chatters over geopolitical threat for the US before Biden takes over the White House also challenge the mood.

Virus updates have been downbeat despite a jump in global vaccinations. Recently, Japan’s Kyodo News suggest further emergencies while New Zealand is also eyeing to tighten foreign arrival checks.

Elsewhere, China finally agreed to cooperate with the World Health Organization (WHO) to allow them to investigate the covid traces. However, the US may still unlike it while Beijing may hate its recent ties with Hong Kong and Taiwan. Furthermore, US President-elect Joe Biden teased “new stimulus program “in the trillions of dollars” and probed the risk-off mood.

It should be noted that Fed policymakers from Dallas and Richmond remain expected economic recovery during the second half of 2021 and favored the risk-on sentiment off-late.

Amid these plays, the US dollar index (DXY) wavers around a three-week top while stocks in Asia-Pacific are mildly bid. Also portraying the -on mood are the upbeat US 10-year Treasury yields, currently up 1.6 basis points (bps) to 1.15%.

Looking forward, a lack of major data/events will keep US politics and COVID-19 updates on the driver’s seat.