- The S&P 500 has rallied further in recent trade to around the 3690 level as hopes for government fiscal aid grow.
- At present, the index trades with gains of around 0.7%.
The S&P 500 index trades at intra-day record highs above 3690 on the final trading day of the week, as traders eye a test of 3700 in the near future. That means the index is up around 24 points or 0.7% on the day.
Fiscal stimulus optimism growing, plus good vaccine news
A few bullish headlines are contributing to hopes that the US Congress can forge a deal on coronavirus economic aid and avert a government shutdown on 11 December. US House Speaker Pelosi told the media that her and McConnell had spoken about tying any Covid-19 relief package to an the bill that would keep the government open, but noted that it is not a done deal yet and issues remain unresolved. Meanwhile, Fox News reported that Senate Republicans appear to be open to the $908B stimulus plan floated by the bipartisan group of Senators.
Elsewhere, seemingly in contradiction to reports late in the Thursday US session that triggered some short-lived downside in US equity markets, Pfizer and BioNTech have reportedly made most of their 2020 vaccine doses already and are on track to reach their 2020 goals. Reports on Thursday alleged they would miss their production goal by half in 2020. Meanwhile, the duo reiterated their confidence that they will be able to deliver 1.3B doses by the end of 2021.
Bad data is good data
Bad data is good data again it seems. The November US labour market report was softer than expected, with the US economy adding just 245K jobs (expected was gains of 469K) and though the unemployment rate dropped 0.2% to 6.9%, this was driven by a 0.2% drop in the participation rate to just 61.5%, still nearly 2% below pre-pandemic levels.
But this failed to hurt US equity market sentiment and seems to instead have given further tailwind to the rally, given that soft data is likely to 1) put pressure on the US Congress to deliver fresh stimulus prior to the Biden administration taking office in January and 2) put pressure on the Fed to deliver more stimulus later in the month via tweaks to the guidance, composition or even size of its QE programme.