Daily Market Color January 25, 2021Vaccine Shortages Pull Treasury Yields Lower Treasury yields decline as rising virus cases weigh on markets President Biden’s stimulus plan is getting some pushback from Congressional Republicans who have rejected the $1.9T bill as too large and too soon after the last stimulus bill in December. That news, coupled with vaccine shortages and rising cases left major US equity indices mixed on the day – the S&P 500 rose 0.4% to hit a new record, while the DJIA fell 0.1%. Treasury yields and swap rates fell across a flattening curve – the 2y10y spread narrowed to ~91 basis points while the 10-year Treasury yield fell 6 basis points. President Biden’s $1.9 trillion stimulus package faces resistance from Congress During a call over the weekend with members of the administration, Congress officials mentioned their concerns over the size and scope of the bill. Some officials suggested passing a smaller bill focused solely on vaccine distribution ahead of the impeachment trial scheduled for February 8th. Biden’s chief of staff commented, “What we want to do is work with the Congress, reach out to members in both parties, see what we can get done as quickly as possible.” Global virus cases pass 100 million while fatalities near 2.2 million In the wake of a new virus strain, the White House has extended its travel bans on Europe and Brazil, and has introduced a ban on South Africa. The US vaccine rollout continues to be delayed due to supply shortages, and the pharmaceutical company Merck has stopped trials on two more potential vaccines. The EU is also experiencing vaccine shortages after AstraZeneca announced it would significantly cut its delivery of doses. Biden administration is tackling US-China relations with “patience” In a briefing earlier today, White House spokeswoman Jen Psaki commented, “the President’s view, is that we need to play a better defense, which must include holding China accountable for its unfair and illegal practices and making sure the American technologies aren’t facilitating China’s military buildup.” The US dollar, which remains relatively low against other currencies, rose 0.2% on the day in response.