Daily Market Color December 30, 2020Equities Rise to Near-Record Highs as Markets Cheer Stimulus Bill Equities rise as markets cheer fiscal stimulus Market sentiment shifted on the second-to-last trading day of 2020 as the passage of the new $900 billion virus relief bill and vaccine rollouts remained in focus. Major equity markets closed higher – the S&P 500 and DJIA rose 0.1% and 0.2%, respectively. Treasury yields and swap rates fell moderately across the flattening curve – the 2y10y spread narrowed to 80 bps. Advance US international trade in goods deficit widened past economic expectations to $84.8 billion in November The trade deficit is at an all-time high, as goods imports rose 2.6% while exports grew only 0.8%. US pending home sales fell 2.6% in November According to The National Association of Realtors, its index declined for a third consecutive month driven by rising prices due to a shortage of properties coupled with increased demand. US dollar declined 0.4% to its lowest since April 2018 The currency is down more than 7% this year, driven lower by a bleak economic outlook and rising virus cases. Economists expect the currency to rebound in 2021 as widespread vaccinations continue and funds from Congress’ stimulus package are distributed. Reminder: markets will close early at 2:00 pm EST tomorrow and be closed on Friday in observance of New Year’s Day.
