US equity markets are closed on Thursday as American’s celebrate Thanksgiving. S&P 500 futures, which trade until 18:15GMT on the Chicago Mercantile Exchange, trade slightly lower in thin volumes. Futures are currently trading just above 3620, slightly more than 1% from all-time highs at 3668. US equity cash markets are closed on Thursday for Thanksgiving holiday. Thus, equity future volumes are very thin in the absence of US participants. Indeed, the Chicago Mercantile Exchange will be closing equity futures and options trade early at 18:15GMT today, and S&P 500 futures look set to continue to trade within thin ranges until then. As things stand right now, S&P 500 futures trade around 0.2% lower at just above 3620. Can December deliver a Santa rally? US equity markets are likely to remain quiet until the end of November, as US participants take long weekends in much larger than usual numbers. Thus, it is worth considering what December might have in store. As a recap of this month; US equity markets surged to all-time highs in November, buoyed on a combination of post-US Presidential election relief (Joe Biden won, but it looks as though Congress will be divided, which ought to block any equity market negative Democrat corporate tax hikes) and vaccine optimism. The S&P 500 is up nearly 10% on the month, the Nasdaq 100 is up nearly 9% and the Dow Jones Industrial Average is up a staggering 11.4%. Indeed, with Pfizer/BioNtech, Moderna and AstraZeneca’s vaccines all expected to gain approval and for mass vaccination to begin in the UK and US ahead of Christmas, there might still be some further “vaccine optimism” to pump valuations even higher. And that doesn’t even take into account the likelihood that more vaccine makers emerge from the woodworks with positive results. Moreover, though it seems unlikely that a lame-duck US Congress can gather the political will, if the Democrats and Republicans surprise markets by announcing they have to some sort of pre-Christmas stimulus deal, this would be another reason for US equity markets to rally. Indeed, Treasury Secretary Mnuchin is tantalising Congress with $455B in funding which he requested back from the US Federal Reserve (who were using the money to fund their emergency lending programmes) and will get by the end of the year. One downside risk constantly being pointed out by analysts is the short-term impact of the Covid-19 winter outbreak in North America and Europe, and how growth is likely to slip into negative territory by 2021 in both of these regions. However, one could argue that these concerns are at this point “in the price” and are being allayed by an increasingly dovish FOMC, who are now expected to make minor, but accommodative, tweaks to their asset purchase programme in December. Whether the FOMC opt to give guidance as to how long purchases will continue, or to buy treasuries with a long-dated maturity, or to up the monthly rate of purchases, the net result is likely to put pressure on US real interest rates, making equities an all the more attractive alternative. Thus, heading into December, it seems as though risks are tilted to the upside for US equity markets. However, with S&P 500 futures currently trading just 1% from all-time highs, a lot of positive news/good expectations about the future are already in the price. Anything that threatens the prevailing vaccine optimism (for example, any problems with distribution), an FOMC disappointment (i.e. they opt not to make any policy changes) or any political tail risk events (for example, any dangerous, unpredictable final geopolitical acts from US President Trump in his dying days in office, like war with Iran) could cause hiccups. S&P 500 futures forms short-term flag, eyes test of ATHs S&P 500 futures are currently consolidating within a short-term pennant. An upside break of this pennant ought to bring this week’s high at 3655 into sight, and then if that level goes, a potential test of all-time highs at 3669. If the pennant breaks t the downside, Wednesday’s lows at 3615 will come into play as the next area of support to note. Below that, the psychological 3600 mark will be important, as will support in the 3580s. Around the 3580s will also come into play the upper bounds of the equity index future’s recent pennant, longer-term pennant structure that formed during the middle days of November. For reference, this downtrend links the 9, 16 and 18 November highs, and will likely offer solid support. S&P 500 four hour chart FX Street FX Street FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions. View All Post By FX Street Expert score 5 Etoro - Best For Beginner & Experts0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 5 Read Review Open My Free Account Your capital is at risk. FXStreet News share Read Next EU Commission: Equivalence decisions for UK financial services won’t be ready by January FX Street 11 months US equity markets are closed on Thursday as American’s celebrate Thanksgiving. S&P 500 futures, which trade until 18:15GMT on the Chicago Mercantile Exchange, trade slightly lower in thin volumes. Futures are currently trading just above 3620, slightly more than 1% from all-time highs at 3668. US equity cash markets are closed on Thursday for Thanksgiving holiday. Thus, equity future volumes are very thin in the absence of US participants. 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