U.S. stock indexes traded higher on Thursday morning and the Dow hit an intraday record, although a report showed weekly claims for unemployment benefits rose to their highest level since August. past, as business closures were re-imposed in some states to combat the coronavirus pandemic.
However, investors are focusing on the prospects of additional government financial assistance, with President-elect Joe Biden to set details of further fiscal stimulus on Thursday evening.
What do the main benchmarks do?
-
The Dow Jones Industrial Average DJIA,
+ 0.35%
increased 144 points, or 0.5%, to 31,203, hitting an intraday record of 31,223.78. -
The S&P 500 SPX Index,
+ 0.24%
was trading at 12 points, or 0.3%, above 3,822. -
The Nasdaq Composite Index COMP,
+ 0.59%
rose 74 points, 0.6%, to 13,203.
The Dow DJIA,
fell less than 0.1% Wednesday just before a House vote to accuse President Donald Trump of inciting the Capitol revolt on Jan. 6, while the S&P 500 SPX,
and Nasdaq Composite COMP,
ended a little higher up.
What is driving the market?
CNN reported that Biden, who is due to speak in Wilmington, Del, is ready Thursday afternoon to outline a spending package that would include more direct payments to American families and significant state and local funding.
Another round of large direct payments to households could be the trickiest part of the package, said Hussein Sayed, chief market analyst at FXTM, in a note, because most Republicans and some Senate Democrats are against “spend too much”.
“On the other hand, opting for a small package will disappoint investors and lead to profits in equity markets,” he said. “Finding the right balance won’t be easy.”
There is talk of additional federal spending while a report on weekly claims for U.S. unemployment benefits in early January was the highest since late August, rising from 181,000 to 965,000 as the COVID-19 pandemic has caused renewed blockades across the country, the Labor Department reported Thursday. Economists on average had estimated that the claims would reach 800,000.
The United States added at least 230,476 new cases Wednesday, according to a New York Times tracker, and counted at least 3,922 deaths, after hitting a record more than 4,400 on Tuesday, the highest in a single day since onset of the outbreak.
However, higher unemployment demand figures in early January may help bolster the argument among those who argue that the economy needs more tax aid as the virus spreads again.
“At some point, the hard work figures like the ones we saw this morning may serve as a test for those asking for a correction, but it seems the market is of the opinion that the light at the end of the tunnel remains in sight, all and the implementation of intensive vaccination. “, wrote Mike Loewengart, investment strategist at E-Trade Financial, in comments sent by email.
“In addition, a heavier report than exceptional work translates into a higher probability of a full throat stimulus package, which acts perversely as a tail wind for the market,” he said.
Optimism for new aid has supported bullish predictions about market performance in 2021. In fact, David Kostin of Goldman Sachs predicts that the S&P 500 will end in 2021 at 4,300.
Meanwhile, investors will also watch bond yields, which rose last week and earlier this week, in a move marked by concerns that another fiscal package could fuel inflation. This could mean problems for stocks, as higher returns make higher stock market valuations more difficult to justify. Investors could also worry that a rise in inflation would see the Federal Reserve relax its bond-buying program faster than expected.
In other economic news, the U.S. import price index rose 0.9% in December and 0.4% in December, not counting fuel prices.
Investors will also pay close attention to a speech by Fed Chairman Jerome Powell at 12:30 p.m. in the East.
Which companies are concentrated?
-
BlackRock Inc.
BLK,
-3.48%
equities fell 3.7%, after the asset manager, with $ 8.7 trillion in assets under management, reported fourth-quarter earnings and revenue that exceeded expectations. -
Actions of Tesla Inc.
TSLA,
+ 0.35%
they were 1.2% lower. The National Highway Traffic Safety Administration sent a letter to the electric vehicle manufacturer requesting the voluntary removal of 158,000 Model X units from 2016, 2017 and 2018 on a possible defect affecting safety functions, including the operation of the rear view camera. -
Looks like Google Alphabet Inc. GOOG share,
+ 0.53% GOOGL,
+ 0.48%
could be in focus after the company said it completed the acquisition of physical tracking company Fitbit. Alphabet’s Class A and C shares rose 0.4%. -
Cisco Systems
CSCO,
+ 0.31%
actions were focused after CNBC reported that it was proposing a slightly higher one forAcacia Communications
ACIA,
+ 31.84% .
Shares of Cisco fell 0.3%, while shares of Acacia rose 31%. -
Shares of Virgin Galactic SPCE,
+ 19.90%
jumped above 20% after ARK Investment Management filed with the Securities and Exchange Commission to launch a publicly traded fund for space exploration.
How are other assets traded?
-
The yield on the 10-year US Treasury note TMUBMUSD02Y,
0.157%
it rose a basis point around 1.10%. -
The ICE US Dollar Index DXY,
+ 0.03% ,
a currency indicator against a basket of six major rivals rose 0.2%. -
Oil futures traded lower, with the US benchmark CL.1,
-0.57%
0.3% lower, at $ 52.77 a barrel. GC00 Gold Futures,
-0.54%
they were trading 0.6% lower at $ 1,843.70 an ounce. -
The pan-European Stoxx 600 SXXP index,
+ 0.69%
increased by 0.4%, while the FTSE 100 UKX in London,
+ 0.65%
increased by 0.5%. -
In Asia, the Shanghai Composite SHCOMP,
-0.91%
closed 0.9% lower while Hong Kong’s Hang Seng HSI index,
+ 0.93%
rose 0.9% and the Japanese Nikkei index 225 NIK,
+ 0.85%
gained 0.9%