December 7, New York: The Wall Street has been witnessing a whirlwind of turns over the past few weeks, especially after the election results were announced. The US live stock futures market remained little changed on Sunday after a record-setting session as Wall Street kept searching for clues in terms of supplementary fiscal aids.
Dow Jones Index and Its Influence on Live Stock Futures Market
The lead index Dow Jones Industrial Average futures traded slightly lower by 17 points or less than 0.1 percent. On the other hand, while S&P 500 were flat while Nasdaq 100 futures advanced only 0.2 percent.
The key averages posted intra-day as well as closing at an all-time high on Friday, December 4, with the Dow Jones now cracking more than 200 points. The S&P 500 and Nasdaq Composite went ahead by 0.9 percent and 0.7 percent respectively. Interestingly, the advances or gains emerged even after the announcement of highly disappointing US employment data. A report published by the Labor Department stated that 245,000 were created in November. Alternately, an array of economists who were approached for a poll by the stock market Dow Jones forecasted that 440,000 jobs were added in the same month.
Sharing their views in terms of job creation and reports published regarding the same, various industry experts share different opinions regarding the same. For example, Ed Yardeni, chief investment strategist, and president, Yardeni Research mentioned that the employment report was “not so bad” since most of the labor-market go-slow jobs in the previous month came from the government sector.
As an investment strategist, Yardeni feels that the message is clear that while the labor market recovery has been lagging behind the overall GDP recovery, both still linger on to regain lost grounds since the lockdown recession of early spring 2020. The unfortunate print also gave US stocks a shot-in-the-arm by boosting expectations of a new fiscal stimulus package that is being passed just before the year-end.
The New Administration’s Concern
Besides the stock updates, even who’s who from the White House went on to express their concerns and opinions. On Friday, Senate Minority Leader Chuck Schumer took to Twitter stating that the report “shows the need for strong” immediate relief is much necessary than ever before. Even President-elect Joe Biden said that the employment data is a forecast of a dark winter.
Sharing his views in terms of economic recovery and markets gaining points, yet another industry expert on grounds of anonymity said that currently, the capital one stock markets are anticipating an incremental stimulus worth at least $700 billion – in 2020 itself. However, since Washington had been experiencing a strong tailwind in late-November and early-December as fiscal growth occurred much faster than it was anticipated, the whole subject has started becoming way more neutral than before.
Having said and done with stocks news, the fact that 2020 has been extremely challenging in terms of the economy is right out there. The country’s lawmakers had been facing an impasse with regards to additional financial aid for a long time till they chose to come up with raising concerns about the economy bouncing back to normal in a post-pandemic world, where everyone continues to struggle with the ‘new normal.’