Futures of U.S. stocks rose Friday, suggesting the S&P 500 is poised for its best week in three months, according to investor bets that a new coronavirus relief spending package will bolster the economy.
Futures tied to the S&P 500 were up 0.5%, indicating that the breadth of the market may continue to rise after closing the record high on Thursday. The benchmark has risen more than 4% this week, on track to gain in a week since the week ending Nov. 6.
Contracts related to the Nasdaq-100, with high technology intensity, advanced 0.4% and those linked to the Dow Jones industrial average increased 0.5%.
The market has intensified this week as President Biden pushed ahead with efforts to approve a $ 1.9 trillion relief package. Democrats are using a special procedure to move the bill forward: the Senate on Friday approved a budget plan that advances the conciliation process needed to get the aid plan approved by a simple majority in the Senate.
Many investors believe the new spending is crucial to boosting the economy, with coronavirus cases still high in some parts of the US.
“That would be a big boost for the economy.” said Edward Smith, head of asset allocation research at Rathbone Investment Management. “It certainly reduces short-term risks while we wait for the vaccine launch to accelerate.”
Economists expect U.S. employers to have added 50,000 jobs last month.
Photo:
Joe Raedle / Getty Images
The U.S. jobs report for January, which will be presented at 8:30 a.m. ET, will show whether the economy is recovering from a winter slowdown. Employers are expected to have added 50,000 jobs last month, according to economists. Payrolls fell in December for the first time since the pandemic caused a business shutdown last spring. The unemployment rate is expected to remain stable at 6.7%.
Investors also remain focused on the deployment of Covid-19 vaccines, which could accelerate the economic recovery. Johnson & Johnson on Thursday called on U.S. regulators to authorize emergency use of its single-shot Covid-19 vaccine, setting the stage for a potential third vaccine to be available in the United States in a few weeks.
“The more vaccines are developed, the more people will start moving,” said Gregory Perdon, co-investment director at private bank Arbuthnot Latham.
Shares of Johnson & Johnson rose more than 2% before the market.
Market volatility has also declined this week, after soaring in late January to its highest level since late October. The rise came when individual investors in online forums injected money into a handful of stocks, prompting frantic trading and sharp price jumps. The Cboe volatility index, an indicator of turbulence in the broader U.S. stock market, fell to less than 22 on Friday, from more than 37 last week.
Those heavily traded stocks have lost strength since then, with GameStop losing nearly 84% of its value so far this week, while AMC Entertainment Holdings fell 46%.
The popular trading app Robinhood Markets removed the last of its trading limits on shares of both companies, according to its website. GameStop rose more than 4% in premarket trading, while AMC gained nearly 3%.
In bond markets, the 10-year Treasury bill yield stood at 1.162%, near its highest closing level since March 2020, at 1.140% on Thursday. Yields fall as prices rise.
Abroad, the pan-continental Stoxx Europe 600 advanced 0.4%. Shares of French bank BNP Paribas rose more than 3% after reporting a lower-than-expected drop in profit.
In Asia, most major benchmarks made progress in closing the negotiation. Japan’s Nikkei 225 gained 1.5% and South Korea’s Kospi index closed 1.1% higher. Hong Kong’s Hang Seng rose 0.6%. China’s Shanghai composite fell 0.2%.
Write to Caitlin Ostroff to [email protected]
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