In the long run, US stock index trading was slightly higher on early morning trading as the market tried to regain record highs.
Dow Jones industrial average contracts gained 71 points. S&P 500 futures and Nasdaq 100 futures traded on slightly positive territory.
The move came after big averages closed on Tuesday, giving up early gains that pushed stocks to record highs at the opening bell. Both the Dow and the S&P 500 posted three-day gains, each down 0.22%. Meanwhile, Nasdaq Composite was down 0.38%.
Russell 2000 closed 1.85% lower for the third consecutive negative session.
In Washington, lawmakers continued to disagree on direct payments to Americans. Senate Majority Leader Mitch McConnell has blocked Senate Minority Leader Chuck Schumer’s effort to speed up the bill, passed by the House late Monday, which will increase checks to $ 2,000 from $ 600. Incentive payments could disappear as early as Tuesday night, said Treasury Secretary Steven Mnuchin.
President Donald Trump backed higher payments and on Tuesday said in a tweet that the measure should be approved “AS MUCH AS MORE. $ 600 IS NOT ENOUGH!”
With only two trading days left this year, major averages are well on their way to a higher end to 2020. The Dow rose 6.3% for the year, while the S&P 500 gained 15.36%. Despite recent sales pressures, Russell 2000 is still growing by 17.4% per year.
But the clear winner from year to date remains Nasdaq Composite, which won 43%.
“We expect strong economic growth to return in 2021 as a result of the winds ahead of the 2020 pandemic and the 2019 US-China trade war,” said Brian Demain, portfolio manager at Janus Henderson Investors. “Although so far leadership has been restricted – largely limited to the digital economy – we expect an extensive recovery, as vaccines are widely implemented and consumers are able to re-engage in the physical economy,” he added.
The number of Covid cases continues to tick higher. The United States now has at least 180,905 new cases and at least 2,210 virus-related deaths each day, based on a seven-day average calculated by CNBC using data from Johns Hopkins University. On Tuesday, the US confirmed its first case of the fastest-growing coronavirus strain that was originally discovered in the UK
Some investors say that another potential wind for stocks is looking forward to preparing for some of the hottest stocks of the year.
The president of Interactive Brokers, Thomas Peterffy, said on Tuesday, in “Squawk Alley”, that in the last few days something “fantastically unusual” has happened: his clients are clearly on the market for the first time.
“Our customers tend to be on the selling side of options and there is such a demand for these money options that our customers tend to become sellers,” he said. “So Robinhood people have long options, and these options are short for Interactive Brokers clients,” he added. In other words, although it is not necessarily a direct bet on the disadvantage, customers take advantage of such high demand on the other side.
Charles Bobrinskoy, vice president of Ariel Investments, reiterated the dangers of a momentum-based market.
“It can’t be that the way to earn investment is just to buy what has happened in recent years,” he told CNBC’s Closing Bell on Tuesday. “This works in impulse markets. Impulse markets are great until they come back. But when they come back, it’s ugly,” he said.
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