Daily Market Color

Continued Stimulus Optimism Pushes All Three Major Equity Indices to Record Highs

Equities reach record highs on stimulus hopes
Continued optimism around the impending $1.9 trillion stimulus package pushed equity indices to all-time highs – the S&P 500 and DJIA rose 0.7% and 0.8%, respectively.  Treasury yields and swap rates ended the day mixed – the 10-year UST yield closed flat at 1.17% while the 30-year UST yield briefly rose above 2% before closing at 1.95%.
Treasury Secretary Janet Yellen expects US to reach full employment by 2022 contingent upon additional fiscal stimulus
Yellen added that if Congress fails to pass additional stimulus, “It would take (until) 2025 in order to get the unemployment rate down to 4% again.”  Her comments come after Friday’s jobs report, which showed nonfarm payrolls grew only +49k in January while the unemployment rate fell to 6.3%.
Congressional Budget Office reports a $15 minimum wage by 2025 would bring 900,000 people above the poverty threshold
While over 27 million people’s wages would be raised, the CBO study shows the policy would cost ~1.4 million jobs and increase the overall cost of producing goods and services.  The policy is part of President Biden’s stimulus proposal and has been a highly divisive topic among officials.
Oil prices reach a 1-year high
Since November, both Brent and WTI have risen over 60%, driven higher by OPEC+ production cuts and a faster vaccine rollout.  Today, Brent and WTI rose 2.1% and 2%, respectively, to hit their highest levels since January 2020.

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