Daily Market Color

S&P 500 Has Its Sixth Record Close of the Year as Jobless Claims Fall

S&P 500 closed at an all-time high after jobless claims fell for a third straight week
The improving economic outlook continues to steer markets, with overall sentiment remaining positive.  Major US equity indices closed higher on the day – the S&P 500 and DJIA closing 1.1% and 0.4% higher, respectively.  Treasury yields and swap rates ended the day mixed – the 10-year UST yield closed flat at 1.13%.
779,000 jobless claims were filed last week, the lowest number since November
The figure beat expectations, falling from 812,000 the week prior.  The drop in claims comes ahead of tomorrow’s jobs report, which is expected to show an unemployment rate of 6.7%, unchanged from last month.
Treasury Secretary Janet Yellen backs President Biden’s $1.9 trillion stimulus plan
Earlier this morning, Yellen re-confirmed her commitment to providing additional virus relief, commenting, “We need to act big.”  Congressional Democrats began taking measures to pass the bill using reconciliation, but Yellen believes Biden prefers “to do this on a bipartisan basis” and cooperate with Republican leaders.  She did not provide color on the timeline for a Congressional vote.
Bank of England leaves their benchmark rate and monetary policy unchanged but asks banks to prepare for negative rates
The BOE estimates that “the majority of firms would be able to implement tactical solutions to accommodate a negative Bank Rate within six months, without material risks to safety and soundness.”  The BOE clarified that negative rates may not actually be introduced but may become necessary if the economic outlook for the UK remains uncertain.

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