The Market Today

Biden to Propose Direct Stimulus Checks of $2,000


by Craig Dismuke, Dudley Carter

2021 ECONOMIC OUTLOOK WEBINAR

Vining Sparks will host our 2021 Economic Outlook Webinar tomorrow, January 12.  During the presentation, we will discuss the forecast tension between the continued headwinds of the virus and the upside risk from the growing pent-up consumer demand.

 

CORONAVIRUS UPDATE (VS Coronavirus Chartbook – PDF)


TODAY’S CALENDAR

There are no economic reports on the calendar today.


OVERNIGHT TRADING

Caution Returns After Strong 2021 Start as Investors Eye Busy Calendar: The growing optimism for more fiscal stimulus that drove equities sanguinely higher to start 2021 (more below) appears to have subsided Monday, as investors brace for a busy week of economic data and the start of corporate earnings season. With last Friday’s December jobs report showing the first payroll decline since April, investors will be keen observers of the more timely jobless claims data on Thursday and Friday’s retail sales data for any impact on consumer spending. Before that retail sales data is released Friday morning, JPMorgan Chase, Citigroup, and Wells Fargo will report annual earnings results and provide an update on their outlooks for 2021. The busy calendar, combined with the ongoing rise of global infections, brought some caution back into the markets on Monday. Stocks in Asia dipped 0.1% and Europe’s Stoxx 600 was trading 0.5% lower. After finishing last week at record levels, U.S. equity futures had declined between 0.6% and 0.8%. The strong start to 2021 was fueled by prospects for the newly-elected Democratic government to agree to additional emergency stimulus in the near-term. President-elect Joe Biden said last week that his administration’s stimulus proposal, which he has planned to announce on Thursday, will be “in the trillions of dollars.” He said again over the weekend that any stimulus should increase the size of the second round of direct payments to individuals, most of which the Treasury has said have already been deposited, from $600 to $2,000. Treasury yields were little changed at 7:30 a.m. CT, with the 10-year yield 0.5 bps lower at 1.11%.


NOTEWORTHY NEWS

ICYMI – December 8, 2021 Weekly Market Recap: Despite a loss of jobs in December, the first monthly decline for payrolls since April, and persistent worries about virus outbreaks at home and abroad, stock indices climbed to records and longer Treasury yields hit their highest levels of the pandemic. The seemingly sanguine shift in U.S. markets was driven primarily by growing expectations for additional stimulus in the months ahead under a Democratic government. Congress certified electoral college votes early Thursday to formally declare Joe Biden as the 46th president of the United States, a process interrupted by chaos that saw the Capitol overtaken by protesters. More important for the stimulus expectations, Democrats took back control of a split Senate with a couple of run-off victories in Georgia. The Senate results overpowered Wednesday’s contractionary ADP report that accurately predicted a leisure-led decline in nonfarm payrolls in Friday’s BLS report, pushing the 10-year yield up 20 bps on the week to 1.11%, its highest yield since March. With the Fed expected to keep its policy rate low for several years, an expectation reinforced by weekly Fedspeak and the December meeting minutes, the 2-year barely budged with a 1.2-bps increase. The resultant 19 bps of steepening of the curve pushed the spread between the two securities above 97 bps to the widest margin since July 2017. Amid those developments, the S&P 500 rose 1.8% to consecutive all-time highs to close the week. Click here to view the full recap.


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