Dow poised to carve out contemporary file to kick off commerce after Presidents Day
U.S. stocks ranked higher on Tuesday as investors watched progress in implementing President Joe Biden’s $ 1.9 trillion coronavirus relief package, and data showed that COVID-19 cases were due on Presidents Day lowest level in four months.
How are stock benchmarks performing?
The futures for the Dow Jones Industrial Average YM00, + 0.36% YMH21, + 0.36% rose 120 points, or 0.4%, to 31,517.
S&P 500 Index Futures ES00, + 0.29% ESH21, + 0.29% rose by 11.90 points or 0.3% to 3,943.
Nasdaq 100 Futures NQ00, + 0.32% NQH21, + 0.32% rose 47.25 points, or 0.3%, to 13,852.
The markets closed on Monday for President’s Day, but before that the Dow DJIA, + 0.09%,
The S&P 500 SPX (+ 0.47%) and Nasdaq Composite COMP (+ 0.50%) all closed at record highs on Friday.
What is driving the market?
Reflation trading appeared to be okay, and benchmark bond yields rose as investors wait for a COVID relief package expected to be below but close to Biden’s $ 1.9 trillion proposal.
The House Budge Committee was expected to bring all of the elements of the Biden government’s ambitious proposal together into a bill to be voted on by the House before the end of the month.
The aid package, backed by Democrats with spokeswoman Nancy Pelosi, includes direct payments of $ 1,400 per person, an expanded child tax credit, state and local government grants, and an expansion of unemployment insurance with federal payments of $ 400 per week until August. 29, reported the Wall Street Journal. This includes gradually raising the minimum wage to $ 15 an hour, despite a major challenge facing the Senate wage measure, where two Democrats have raised concerns.
The number of COVID-19 cases has since declined. In the US, an average of 85,798 new cases were reported per day for the past week, a 41% decrease from the average two weeks ago.
The global number of confirmed COVID-19 cases rose to over 109 million on Tuesday, according to Johns Hopkins University, while the death toll rose to over 2.4 million. More than 52,000 new cases were reported on Monday, up from 64,938 the day before and 89,727 a week earlier. However, the dates may be underreported as fewer staff are available on weekends and public holidays.
The declining virus cases and hopes for more economic help to limit the economic damage caused by COVID are dragging millions of people, particularly part of Texas, into the dark amid a crippling winter storm that has increased demand for COVID energy plants. The Texas Electric Reliability Council estimated that approximately 2 million households were without electricity as of Monday.
The energy problems have pushed oil and natural gas prices to their highest levels in months. West Texas Intermediate CL.1 was previously above USD 60 a barrel at + 0.61%, while Brent Oil, the international benchmark BRN00, was -0.51%.,
was over $ 63 a barrel and NG00 natural gas prices, + 9.75%, rose over 9% that day.
With energy price worries, the bond market has been plagued by the obvious hope for a better economic picture with vaccine launches and falling cases.
The 10-year Treasury Note yield TMUBMUSD10Y (1.261%) rose from 1.199% on Friday to around 1.26%. Returns rise when prices fall.
The steady rise in yields, driven by rising borrowing costs and increased competition between the attractiveness of risk-free fixed income versus equities, doesn’t seem to detract from the current optimistic picture for equities. However, investors have been watching this dynamic carefully.
“While returns remain focused on the recovery of the Covid-19 economy, they are still below exposure to stocks,” wrote Peter Cardillo, chief market economist at Spartan Capital Securities, in a research report on Tuesday.
The New York Fed’s Empire State Business Conditions Index rose 8.6 points to 12.1 in February, the regional Fed Bank said Tuesday. This is the highest level of activity since July. According to a survey by the Wall Street Journal, economists had expected a value of 5.9. Any value above zero indicates an improvement in conditions.
Which stocks are in focus?
Shares of Southwest Airlines Co.. LUV rose in premarket trading after the carrier announced its January operations update and provided a February outlook showing further improvement.
Shares of Palantir Technologies Inc.. PLTR fell Tuesday after the data integration and software company posted a surprise loss in the fourth quarter, despite sales rising faster than forecast.
CVS Health Corp. CVS have changed little in premarket retail after the drug and healthcare company reported fourth quarter profits and sales that exceeded expectations.
Shares of Shopify Inc. SHOP climbed and hit record levels in premarket trading on Tuesday after Susquehanna analyst John Coffey raised his target price by 37% ahead of the e-commerce platform company’s fourth-quarter report.
Shares of Microsoft Corp. MSFT rose to another record in premarket trading on Tuesday after Wedbush analyst Dan Ives raised his price target and said cloud deal activity is on its next growth spurt.
What are other markets doing?
Japan’s Nikkei 225 Index NIK (+ 1.28%) rose 1.3% after hitting above 30,000 for the first time in more than 30 years on Monday. Hong Kong’s Hang Seng Index HSI rose 1.9% + 1.90% while trading in Shanghai remained closed for the New Year holidays.
In Europe, the Stoxx 600 SXXP (-0.03%) and the London-based FTSE 100 UKX (-0.09%) each gained 0.1%.
The ICE US Dollar Index DXY, + 0.07%,
A measure of the currency versus a basket of six major competitors has hardly changed.
Oil futures pulled back from previous gains as refinery shutdowns underscored concerns over short-term crude oil demand. The US benchmark CL.1, + 0.61%, rose 0.5% near $ 59.79 a barrel after previously pushing above $ 60.
Gold futures fell -1.67% on April contract GCJ21 and fell 1.6% near $ 1,797 an ounce.