Stocks rose Wednesday, extending Tuesday’s advances as investors looked ahead to the first actions of the incoming Biden administration.
Each of the three major indexes rose, and both the S&P 500 and Nasdaq hit record intraday highs. Shares of Netflix (NFLX) spiked 12% after the company added more users than expected in the fourth quarter and surpassed 200 million paid subscribers for the first time ever.
On Wednesday, all eyes turned to the inauguration of President-elect Joe Biden, which took place at the West Front of the Capitol just noon before in a scaled-down, socially distant event.
In his first hours in office, Biden is set to immediately begin signing executive actions to address the pandemic, virus-stricken economy, climate change and racial equity, according to a memo over the weekend from incoming White House Chief of Staff Ron Klain.
Moreover, Biden is set to quickly begin pushing to get more virus relief aid into the economy, after having unveiled a $1.9 trillion proposal last week that would include increased stimulus checks, extended unemployment benefits and aid to state and local governments, among other measures.
Janet Yellen, Biden’s nominee for Treasury Secretary, advocated for significant additional coronavirus relief spending during her confirmation hearing before the Senate Finance Committee on Tuesday, and added that she would work with the Biden administration on its other priorities as well, including increasing infrastructure investment, enacting environmental protection legislation and eventual tax reforms.
Still, her discussions of the $1.9 trillion stimulus package received some push-back from Republican lawmakers, many of whom balked at passing another major package that they suggested might not be targeted enough to provide support only to those who need it most.
The virus’s human and economic toll became still-more evident this week, as the U.S. passed the grim milestone of 400,000 total coronavirus-related deaths for the first time as of Tuesday. Deaths and hospitalizations have spiked in the last week, as the post-holiday spike emerged in full force.
But even given the virus’s current spread, traders have fixed their gaze firmly toward the future, awaiting the acceleration of the coronavirus vaccine roll-out and the economic reopening expected to take place in its wake.
“Markets are forward-looking, so it’s not exactly about the immediate coronavirus increase in case, hospitalizations. It’s more about what the economy is going to look like later this year,” Ryan Payne, Payne Capital Management president, told Yahoo Finance on Tuesday. “And I think when you start looking at [the fact that] you have a new president, you have a Democratic majority in both the House and the Senate, the one thing I think we can bet on here is we’re going to see a lot of spending everything from this $1.9 trillion bill they’re trying to pass, on top of the $3 trillion we already passed last year plus the $900 billion we already passed in December, and we could see some infrastructure deal down the line which will be another multi-billion dollar bill.”
“We’re just looking at so much liquidity out there, and I think what the market is telling you right now — you’re starting to see interest rates go up, you’re starting to see commodity prices go up — that inflation is a real thing and printing all this cash is certainly going to cause inflation as we look out later in the year,” he added.
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10:30 a.m. ET: Homebuilder confidence slips in January to the lowest level since September
Homebuilder confidence unexpectedly fell in January, reaching the lowest level in four months as rising lumber prices and COVID-19 cases weighed on sentiment, according to the National Association of Homebuilders (NAHB).
The NAHB’s monthly housing market index declined to 83 in January from 86 in December, missing consensus estimates for an unchanged reading, according to Bloomberg data. Still, the index remains up sharply from this time last year, when the index was at 75.
“Despite robust housing demand and low mortgage rates, buyers are facing a dearth of new homes on the market, which is exacerbating affordability problems,” NAHB Chairman Chuck Fowke said in a statement. “Builders are grappling with supply-side constraints related to lumber and other material costs, a lack of affordable lots and labor shortages that delay delivery times and put upward pressure on home prices. They are also concerned about a changing regulatory environment.”
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9:30 a.m. ET: Stocks open higher as Inauguration Day kicks off
Here’s where markets were trading shortly after the opening bell:
S&P 500 (^GSPC): +21.63 (+0.57%) to 3,820.54
Dow (^DJI): +86.71 (+0.28%) to 31,017.23
Nasdaq (^IXIC): +138.42 (+1.06%) to 13,336.37
Crude (CL=F): +$0.66 (+1.25%) to $53.64 a barrel
Gold (GC=F): +$15.30 (+0.83%) to $1,855.50 per ounce
10-year Treasury (^TNX): +0.9 bps to yield 1.101%
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8:45 a.m. ET: Morgan Stanley shares rise after bank’s 4Q results top estimates, driven by strong trading business
Morgan Stanley (MS) became the latest big bank to report a surge in trading revenue at the end of 2020, helping catapult the full-year results for Wall Street’s biggest equity trading shop to record levels. Shares rose about 2% in pre-market trading.
Equity trading revenue grew 30% over last year to $2.5 billion, while fixed-income trading increased 31% to nearly $1.7 billion. Investment banking was also a strong area, with revenues in this business growing 46% to $2.3 billion, driven largely from a spike in revenue from underwriting IPOs and advising mergers and acquisitions.
Overall, fourth-quarter net revenues grew 25% to an estimates-topping $13.6 billion, while net income grew by more than 50%. For the full year, net revenues were a record $48.2 billion, rising more than 16% from the $41.4 billion the bank reported year ago.
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7:17 a.m. ET Wednesday: Stock futures point to a higher open
Here were the main moves in markets, as of 7:18 a.m. Wednesday:
S&P 500 futures (ES=F): 3,804.00, up 13.5 points or 0.36%
Dow futures (YM=F): 30,863.00, up 35 points or 0.11%
Nasdaq futures (NQ=F): 13,085.50, up 100 points or 0.77%
Crude (CL=F): +$0.61 (+1.15%) to $53.59 a barrel
Gold (GC=F): +$6.70 (+0.36%) to $1,846.90 per ounce
10-year Treasury (^TNX): +1.2 bps to yield 1.104%
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6:06 p.m. ET Tuesday: Stock futures rise, extending earlier gains
Here were the main moves in markets, as of 6:06 p.m. ET Tuesday:
S&P 500 futures (ES=F): 3,799.5, up 9 points or 0.24%
Dow futures (YM=F): 30,878.00, up 50 points or 0.16%
Nasdaq futures (NQ=F): 13,044.25, up 58.75 points or 0.45%
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