On Tuesday, stock trading was higher amidst speculations of Congress’s continued negotiations on an additional package for economic relief and vaccines for Covid-19 commenced to roll out across the country.
The Dow Jones Industrial Average was up by 0.3% or 100 points, the S&P 500 was higher by 0.6%, and the Nasdaq Composite advanced 0.7%.
The Dow climbed 3.5% after Nikkei reported Apple’s plans to increase iPhone production by 30% in the first half of the coming year. Tech and energy stock performed the best in the S&P 500, gaining 1.2% each.
The latest proposal for another round of economic relief was released by lawmakers on Monday evening. It has split a previous bipartisan proposal into two sections.
In this fresh plan, a spending of $748 billion is planned for, which includes federal unemployment benefits of $300 per week and another $300 billion for additional loans under the Paycheck Protection Program.
A second plan of a $160 billion bill would take in the more controversial areas of business liability protections as well s financial assistance to state and local governments.
Pelosi spokesman Drew Hammill tweeted that House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin has discussed the stimulus proposal and the expanded government funding negotiation. The pair “discussed the urgency of the committees finishing their work as soon as possible,” Hammill said.
Pelosi spokesman Drew Hammill has tweeted a stimulus deal proposal push which comes as investors and Americans are seen grappling with a low near-term outlook, with possible economic growth prospects only in 2021, at the end of the pandemic.
The first round of vaccine shots by Pfizer and BioNTech were administered in the country on Monday. However, New York City Mayor Bill de Blasio has warned residents that a full shutdown could be round the corner protect city hospitals after 300,000 deaths recorded from Covid-19, reports from Johns Hopkins University data say.
Chief economist at Wilmington Trust, Luke Tilley said that another stimulus package was required to prevent the economic recovery from coming to a standstill before the vaccine can be distributed.
“With the continued rising cases and mass vaccinations still a ways out, we could see some further weakness in jobs and even a flattening where we’re not even adding jobs at all … that’s absolutely a possibility for this next jobs report,” Tilley said. “And if we were to not get another stimulus package, you’re going to have 10 to 11 million people fall off the unemployment rolls right away, and that would hit spending as well.”
The Food and Drug Administration revealed that Moderna’s coronavirus vaccine has met the requirements for an emergency use. If the FDA flashes its green light, the vaccine will become the second to be approved for use in the country. Shares of Moderna dipped 3.4%.
In futures, the Nasdaq Composite and the small-cap Russell 2000 advanced while the S&P 500 and Dow fell. S&P 500 decline 0.4%, its fourth-straight negative day.
Despite S&P 500 and Dow’s recent weakness, the three major indexes are trading at record highs. Chief investment strategist at wealth advisory firm Waddell and Associates, David Waddell, said that this could be a typically a bullish seasonal trend for stocks.
“We may have already gotten a little bit of a Santa Claus rally,” Waddell said. “So normally the markets would accelerate from here into year-end, and they may again, but the run has been such a strong one, I wouldn’t be surprised, and actually I’d rather, if the market consolidated its gains a little bit.”