Daily Market Color

Equities 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.

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