Monday February 8th

8-02-2021

U.S. stock futures rise following Wall Street’s best week since November

U.S. stock index futures rose early Monday, as the major averages looked to build upon gains following the best week since November amid optimism toward more Covid stimulus. Futures contracts tied to the Dow Jones Industrial Average rose 120 points, or 0.4%. S&P 500 futures also added 0.4% and Nasdaq 100 futures gained 0.3%. Treasury Secretary Janet Yellen urged Congress on Sunday to pass President Joe Biden’s stimulus plan, saying if it does the U.S. could return to full employment by 2022. “There’s absolutely no reason why we should suffer through a long slow recovery,” Yellen said during an interview on CNN’s “State of the Union.” “I would expect that if this package is passed that we would get back to full employment next year.” The Senate and House each passed a budget resolution on Friday, starting the reconciliation process that would allow Biden’s $1.9 trillion rescue package to get through the Democratic-held Senate with a simple majority. The package includes $1,400 stimulus checks, supplemental jobless benefits and Covid-19 vaccine and testing funds. On Monday, bitcoin’s price surged to an all-time high above $44,000 after Tesla revealed it bought $1.5 billion worth of the digital asset and said it would soon accept bitcoin as payment for its products. Wall Street was coming off a solid week as the market shook off fears of a speculative trading frenzy. The S&P 500 closed at a record high on Friday and gained 4.2% last week. The Dow and the Nasdaq Composite rose 3.6% and 5.4%, respectively, in the prior week. The Russell 2000, meanwhile, is on its longest daily winning streak since May, and gained 7.7% last week for its best weekly performance since June. “While the economy is likely in a short-term stall as vaccinations roll through the population, it would take an epic unforeseen failure in the rollout of the various vaccines to prevent the domestic and economic engine from ramping greater than most expect,” Tony Dwyer, chief market strategist at Canaccord Genuity, said in a note. Meanwhile, another busy week of earnings is on deck with 78 S&P 500 components set to report quarterly results, including Twitter, GM, Coca-Cola and Disney. Of the 286 companies in the S&P 500 that have reported earnings for the fourth quarter, 83.6% topped analyst expectations, according to Refinitiv. On the coronavirus front, more contagious variants continue to spread throughout the U.S. On Friday Virginia health officials reported the state’s first case of the strain first identified in South Africa. On Sunday South Africa halted distribution of AstraZeneca’s vaccine given its minimal efficacy against the strain first identified in the country. “We are still very much in a bull market at the early stages of an economic recovery that’s gaining momentum,” Michael Wilson, chief U.S. equity strategist at Morgan Stanley, said in a note to clients Sunday. “We continue to recommend stocks with the most upside to an improving economic backdrop as the vaccines are distributed and normal activities resume,” he added. Stocks in Asia-Pacific were mostly higher on Monday, as investors monitored shares of China’s tech giants following the release of new anti-monopoly guidelines over the weekend. The broader Hang Seng index in Hong Kong rose 0.11% to close at 29,319.47. Mainland Chinese stocks also advanced on the day: The Shanghai composite was up 1.03% to 3,532.45 while the Shenzhen component gained 1.748% to 15,269.63. The Kospi in South Korea lagged regionally as it declined 0.94% on the day to 3,091.24. In Japan, the Nikkei 225 surged 2.12% to close at 29,388.50 while the Topix index gained 1.75% to finish its trading day at 1,923.95. Oil prices rose on Monday, with Brent futures nearing $60 a barrel, boosted by supply cuts among key producers and hopes for further U.S. economic stimulus measures to boost demand. Brent crude for April touched a high of $59.95 a barrel and was at $59.85 by 0041 GMT, up 51 cents, or 0.9%. Front-month prices last hit $60 on Feb. 20, 2020. U.S. West Texas Intermediate crude futures advanced 54 cents, or 1%, to $57.39 a barrel, the highest since January last year. Gold rose on Monday as investor focus returned to prospects of a substantial U.S. stimulus package, which bolstered bullion’s appeal as an inflation hedge and offset pressure from a resultant rally in equities and a firmer dollar. Spot gold rose 0.8% to $1,825.69 per ounce. U.S. gold futures also added 0.6% to $1,822.90.