Daily Market Color January 7, 202110-Year Continues to Climb While Stocks Close at Record Highs After Democratic Sweep Rates and equities march higher as markets celebrate stimulus prospects Markets remained focused on the prospect of additional virus relief from Congress. All three major equity indices closed at record highs – the S&P 500, DJIA, and Nasdaq each rose 1.6%, 0.7%, and 2.6%. Treasury yields continued to rise across a steepening curve – the 10-year UST yield closing another 4 bps higher at 1.07%. Congress formally certifies President-elect Joe Biden’s 2020 victory Following the violence at the US Capital, Congress recognized Biden as the next president. Democrats are now set to take control of the House, Senate, and presidency, which increases the chances of additional virus relief. Biden promised that direct stimulus checks would be increased from $600 to $2,000 and sent out “immediately” following the Democratic sweep. Initial jobless claims fell to 787,000 last week The figure was little changed from the week prior, declining only 3,000. Claims remain well above pre-pandemic levels, with the four-week moving average at 818,750. Tomorrow’s jobs report is also expected to reflect these elevated unemployment levels, likely driven by a sharp decline in the pace of hiring from November. US international trade deficit widened to a 14-year high of $68.1 billion in November According to the report, “Year-to-date, the goods and services deficit increased $73.6 billion, or 13.9 percent, from the same period in 2019. Exports decreased $372.3 billion or 16.1 percent. Imports decreased $298.7 billion or 10.5 percent.”
