The US stock index rose on Sunday to overnight transactions, as major averages sought to accelerate gains after the best week of November.
Dow-related futures gained 75 points, or 0.27%. The S&P 500 futures was up 0.3%, while the Nasdaq 100 futures rose 0.33%.
The S&P 500 closed at a record high on Friday and posted its fifth consecutive positive session for the first time since August. The Dow is also on the longest daily winning streak since August, while the Nasdaq Composite posted its fourth positive session in five on Friday. The technology index is also closed at a record high.
“We are still very much in a stock market in the early stages of a booming economic recovery,” Michael Wilson, chief equities strategist at Morgan Stanley, said in a note to clients on Sunday. “We continue to recommend stocks with the greatest benefits to an improved economic environment, as vaccines are distributed and normal activities resume,” he added.
All three major averages ended the week on the green, each recording the best week of November, as fears of a short cut in a handful of stocks eased that led to a wider market contagion. Meanwhile, Russell 2000 is on the longest daily winning streak since May and gained 7.7% last week for its best weekly performance in June.
“Shares continue to rise further and are likely to reach the 4000 level for the S&P 500,” said JC O’Hara, chief market technician at MKM Partners. “Trends continue to be positive … The severity of the upward slope should continue to attract fast money, but in the longer term, patients’ money will be kept on the sidelines until a withdrawal develops,” he added.
The Senate and House each passed a budget resolution on Friday, beginning the reconciliation process that would allow President Joe Biden’s $ 1.9 trillion bailout package to go through the Senate held by a simple majority of Democrats.
The package includes $ 1,400 incentive checks, additional benefits for the unemployed, and Covid-19 vaccination and testing funds.
Treasury Secretary Janet Yellen said Sunday that if Biden’s stimulus plan is adopted, the United States could return to full employment by 2022.
“There is absolutely no reason why we should suffer a slow and long recovery,” Yellen said in an interview with CNN’s State of the Union. “I would expect that if this package is adopted, we will return to full employment next year.”
Meanwhile, another earnings-laden week is on deck, with 78 S&P 500 components set to report quarterly results. Deck names include Cisco, Twitter, Yelp, Uber, MGM, Mattel, GM, Coca-Cola and Disney.
On the coronavirus front, several contagious variants continue to spread in the US On Friday, Virginia officials reported the first case of the strain first identified in South Africa. On Sunday, South Africa stopped distributing the AstraZeneca vaccine, given its minimal effectiveness against the strain first identified in the country.
In the US, the launch of the vaccine continues. “Ground boots are becoming more effective in distributing the vaccine, and positive data from studies have raised hopes that a third vaccine will be available soon for emergency use,” said Ryan Detrick, chief market strategist for LPL Financial. “Obviously, as a larger proportion of the population receives their vaccinations, economic activity can resume and employment in hard-hit jobs can resume.”
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