Daily Market Color December 29, 2020Rates Rise Despite Congress’ Stimulus Check Disagreement Equities fall amidst Congress’ direct stimulus negotiations Major equity indices pulled back from record highs after Senate Republicans blocked a vote to increase direct checks – both the S&P 500 and DJIA fell 0.2%. Treasury yields and swap rates rose moderately across the curve – the 10-year UST yield rose 1 bp to 0.93%. House votes to increase direct stimulus checks from $600 to $2,000, Senate vote delayed When signing the virus relief bill, President Trump asked Congress to revisit three issues: larger direct stimulus checks, Section 230 legal liability protections for internet platforms, and potential election fraud. Senate Majority Leader Mitch McConnell decided to push today’s vote on direct checks despite backlash from Democrats, adding “this week, the Senate will begin a process to bring these three priorities into focus.” Main Street Lending Program cutoff date extended from December 31st to January 8th due to late-stage submissions As of December 23rd, the Fed had granted over $15 billion in loans, with nearly half funded just over the past month. Boston Fed President Eric Rosengren added, “The fact that we’ve seen a spike in volume at this time highlights that there certainly was demand for many midsize firms and nonprofit organizations to use the facility under the terms that we already had.” COVID-19 hospitalizations reach new record, Southern California expected to increase restrictions The US is not on track to meet its vaccination goal of 20 million people by January 1st, but Dr. Anthony Fauci believes there will be “an increase in momentum” next month. The US now has over 19.3 million confirmed cases with fatalities nearing 335,000.
