Dow trades on record as worst jobless unemployment report since August, backing more tax aid

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U.S. stock benchmarks traded on Thursday morning, and the Dow hit an intraday record, despite a report showing that weekly jobless claims are rising to their highest level since August last year as business blockages have has been imposed again in some states to combat the coronavirus pandemic.

However, investors are focusing on the prospects of additional financial support from the government, with President-elect Joe Biden set to detail a higher fiscal stimulus on Thursday night

What do the main landmarks do?

  • Dow Jones Industrial Average DJIA,
    + 0.38%
    rose 144 points, or 0.5%, to 31,203, reaching an intraday record of 31,223.78.

  • S&P 500 SPX Index,
    + 0.27%
    traded 12 points, or 0.3%, higher at 3,822.

  • Nasdaq Composite Composite Index,
    + 0.60%
    climbs 74 points, or 0.6%, to 13,203.

The Dow DJIA,
+ 0.38%
fell by less than 0.1% Wednesday just before the House vote on President Donald Trump’s indictment of inciting the January 6 Chapter riot, while the S&P 500 SPX,
+ 0.27%
and Nasdaq Composite COMP,
+ 0.60%
it ended a little higher.

What drives the market?

CNN reported that Biden, who is due to speak in Wilmington, Del., Is prepared late Thursday to outline an spending package that would include more direct payments to American families and significant state and local funds.

Another round of large direct payments to households could be the hardest part of the package, Hussein Sayed, chief market analyst at FXTM, said in a note, as most Republicans and some Democrats in the Senate are against “going too far.” ”.

“On the other hand, opting for a small package will disappoint investors and lead to profits in the stock markets,” he said. “Finding the right balance will not be easy.”

The discussion of additional federal spending comes as a report on weekly US benefit claims in early January was the highest since late August, rising 181,000 to 965,000 as the COVID-19 pandemic caused renewed blockages across the country, the Department of Labor reported on Thursday. Economists have estimated on average that the claims will reach 800,000.

The United States added at least 230,476 new cases on Wednesday, according to a New York Times tracker, and counted at least 3,922 deaths, after setting a record high of 4,400 on Tuesday, the most in a single day since the beginning outbreak.

However, higher numbers of claims for unemployment in early January may help support the argument among those who say the economy needs more tax aid as the virus spreads again.

“At some point, the number of difficult jobs, as we saw this morning, may serve as an indication for those requesting a correction, but the market view seems to be that the light at the end of the tunnel remains visible, despite an ongoing vaccination launch. “, Wrote Mike Loewengart, investment strategist at E-Trade Financial, in e-mail comments.

“Moreover, a darker ratio than that of exceptional positions translates into a higher probability for a package of full-necked stimuli, which acts perversely as a tailwind for the market,” he said.

Optimism for new aid has supported the forecast for market performance in 2021. Indeed, Goldman Sachs’ David Kostin expects the S&P 500 to close at 4,300 in 2021.

Meanwhile, investors will also be looking at bond yields, which ticked above last week and earlier this week, in a move fueled by concerns that another fiscal package could fuel inflation. This could mean problems for stocks, as higher returns make market valuations more difficult to justify. Investors may also be worried that rising inflation will cause the Federal Reserve to relax its bond-buying program faster than expected.

In other economic news, the US import price index rose 0.9% in December and 0.4% in December, excluding fuel prices.

Investors will also pay close attention to a speech by Fed Chairman Jerome Powell at 12:30 p.m. East.

Which companies are concentrated?
  • BlackRock Inc.
    BLK,
    -3.27%
    shares fell 3.7% after the asset manager, with assets under management of $ 8.7 trillion, reported earnings and revenue in the fourth quarter that exceeded expectations.

  • Actions of Tesla Inc.
    TSLA,
    + 0.27%
    were 1.2% lower. The National Administration for Highway Traffic Safety has sent a letter to the electric vehicle manufacturer requesting the voluntary withdrawal of 158,000 Model X units from 2016, 2017 and 2018 for a possible defect affecting safety functions, including the operation of the viewing camera.

  • Father Google Alphabet Inc. share GOOG,
    + 0.57%

    GOOGL,
    + 0.52%
    could be in the spotlight after the company said it had completed the acquisition of Fitbit fitness tracking. Class A and C Alphabet shares rose 0.4%.

  • Cisco Systems
    CSCO,
    + 0.24%
    The stock was in the spotlight after CNBC reported that it was proposing a little higher forAcacia Communications
    ACIA,
    + 31.86%.
    Cisco shares fell 0.3%, while Acacia shares rose 31%.

  • Shares of Virgin Galactic SPCE,
    + 20.17%
    jumped more than 20% after ARK Investment Management filed with the Securities and Exchange Commission to launch a publicly traded fund to explore the space.

How are other assets traded?

  • Yield on the 10-year US Treasury note TMUBMUSD02Y,
    0.165%
    increased by 1 basis point around 1.10%.

  • ICE US Dollar DXY Index,
    + 0.03%,
    an indicator of the currency against a basket of six major rivals increased by 0.2%.

  • Oil futures traded lower, with the US reference value CL.1,
    -0.59%
    0.3% lower at $ 52.77 a barrel. Gold futures GC00,
    -0.51%
    they traded 0.6% lower at $ 1,843.70 an ounce.

  • Pan-European SXXP Index Stoxx 600,
    + 0.68%
    increased by 0.4% more, while the FTSE 100 UKX in London,
    + 0.65%
    increased by 0.5%.

  • In Asia, Shanghai Composite SHCOMP,
    -0.91%
    closed 0.9% lower, while Hang Seng Index HSI in Hong Kong,
    + 0.93%
    rose 0.9% and the Japanese Nikkei index 225 NIK,
    + 0.85%
    earned 0.9%

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