US futures rose on Friday, suggesting that the S&P 500 is set for the best week in three months, with investors betting that a new spending package to save the coronavirus will boost the economy.
S&P 500 futures rose 0.5%, indicating that the broad market margin could continue to rise after closing at a record high on Thursday. The benchmark rose by more than 4% this week, on the road to the biggest one-week gain since the week ending November 6.
Contracts related to the powerful Nasdaq-100 technology advanced by 0.4%, and those related to the Dow Jones industrial average increased by 0.5% more.
The market rallied this week as President Biden continued efforts to pass a $ 1.9 trillion aid package. Democrats are using a special procedure to move forward with the stimulus bill: The Senate approved a budget plan on Friday that advances the reconciliation process needed for the aid plan to be approved by a simple majority in the Senate.
New spending is seen by many investors as crucial to sustaining the economy, with coronavirus cases still high in parts of the United States.
“It would be a huge boost for the economy.” said Edward Smith, head of asset allocation research at Rathbone Investment Management. “It certainly reduces any short-term risk as we wait for the vaccine to be fully launched.”
Economists expect US employers to add 50,000 jobs last month.
Photo:
Joe Raedle / Getty Images
The US jobs report for January, which will take place at 8:30 AM ET, will show whether the economy is recovering from a winter slowdown. Employers are expected to add 50,000 jobs last month, according to economists. Wages fell in December for the first time since the pandemic triggered the closure of businesses last spring. It is estimated that the unemployment rate will remain at 6.7%.
Investors also remain focused on launching Covid-19 vaccines, which could accelerate the pace of economic recovery. Johnson & Johnson on Thursday called on U.S. regulators to authorize the emergency use of its unique vaccine, Covid-19, setting the stage for a potential third vaccine to become available in the United States in a few weeks.
“The more vaccines are launched, the more people will start moving,” said Gregory Perdon, co-head of investment at private bank Arbuthnot Latham..
Johnson & Johnson shares rose more than 2% premarket.
Market volatility also fell this week, after rising in late January to its highest level since late October. The rise came as individual investors on online forums injected money into a handful of shares, leading to frantic trading and a sharp rise in prices. The Cboe Volatility Index, an indicator of turbulence in the wider US stock market, fell to less than 22 on Friday from more than 37 last week.
Strongly traded shares have lost steam, GameStop has fallen nearly 84% in value so far this week, while AMC Entertainment Holdings has fallen 46%.
The popular trading application Robinhood Markets has removed the last trading limits of the shares of both companies, according to its website. GameStop grew by more than 4% in premarket trading, while AMC gained almost 3%.
In the bond markets, the yield on the 10-year treasury note ticked up to 1.162%, close to the highest level of closing in March 2020, from 1.140% on Thursday. Yields fall as prices rise.
Abroad, the pan-continental Stoxx Europe 600 advanced 0.4%. Shares of French bank BNP Paribas rose more than 3% after reporting a lower-than-expected drop in profit.
In Asia, most major benchmarks advanced to the end of trading. The Japanese Nikkei 225 gained 1.5%, and the Kospi index in South Korea closed 1.1% higher. Hong Kong’s Hang Seng rose 0.6%. Chinese composite Shanghai rose 0.2% below.
Write to Caitlin Ostroff to [email protected]
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