US equity futures rise slightly after record Friday session

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US equity futures rose slightly on Sunday night after a record session as Wall Street sought clues to further tax help.
Dow Jones Industrial Average futures traded 50 points higher, 0.2%. The S&P 500 climbed 0.2%, and futures on the Nasdaq 100 advanced 0.3%.

The major averages posted all-time intraday and closing highs on Friday, with the Dow breaking over 200 points. The S&P 500 and the Nasdaq Composite gained 0.9% and 0.7% respectively.

These gains came even after the release of disappointing US employment data. The Department of Labor said 245,000 people had been created in November. Economists polled by Dow Jones had forecast that 440,000 people were added last month.

Ed Yardeni, president and chief investment strategist at Yardeni Research, wrote that the jobs report was “not so bad” that most of the labor market slowdown last month came from government jobs.

“The clear message is that while the labor market recovery has lagged behind the recovery in overall GDP, both continue to regain ground lost during the foreclosure recession of March and April,” added Yardeni.

The disappointing impression also boosted stocks by raising expectations of a new fiscal stimulus package adopted before the end of the year.

In a tweet Friday, Senate Minority Leader Chuck Schumer said the report “shows that the need for strong and urgent emergency aid is more important than ever.” President-elect Joe Biden also said the data foreshadowed a “dark winter.”

The comments follow a bipartisan group of senators who unveiled a $ 908 billion aid proposal earlier last week. Senate Majority Leader Mitch McConnell initially ended the measure, but a spokesperson for House Speaker Nancy Pelosi later said she and McConnell discussed their “joint commitment. to complete an omnibus. [spending bill] and COVID relief as soon as possible. ”

“At this point, the market is forecasting at least several hundred billion dollars of incremental stimulus in 2020,” Adam Crisafulli, founder of Vital Knowledge, said in a note. But “while Washington had been a tailwind in late November and early December as fiscal progress proceeded faster than expected, the whole issue is starting to become more neutral (and perhaps a headwind as Congress fails to respond to investor assumptions). ”

Lawmakers had been deadlocked over additional budget support for months before last week, raising concerns about the economic recovery from the coronavirus pandemic.

More than 14 million cases of Covid-19 have been confirmed in the United States, along with more than 282,000 coronavirus-related deaths, according to data from Johns Hopkins University. Hospitalizations have also reached record levels in the U.S. The growing number of coronavirus cases has led some states and cities to re-impose stricter social distancing measures to curb the outbreak.

“The renewal of lockdown restrictions in response to the third wave of the pandemic is expected to weigh on the economy in the coming months, but we don’t expect a double dip,” Yardeni said. “The economy could be booming next spring if we are sufficiently vaccinated against the virus. ”

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