Another 1.9 billion in US COVID aid is one of many things Joe Biden and his team will be pushing for in the coming months. Once again it is all about stimulus in the current market. How this plays out in the coming months will affect sentiment. A stimulus package this big will be difficult to pass the Senate even though they have a slight majority.
Otherwise, much of the move overnight came from ‘stay at home’ (Tech and Communication stocks) after Netflix reported. Netflix missed expectations on earnings but many still saw it as a solid result. Investors are buying up in anticipation of the FAANG stocks reporting over the next week.
So, sentiment overall is still positive across equities, with Donald Trump leaving peacefully and quietly much of the uncertainty is gone for now. With Vaccines being rolled out and plenty more stimulus and very accommodative monetary policy, markets should continue to hold the uptrend.
The XJO is expected to open higher this morning near 6825 following fresh all-time highs in the U.S.
Yesterday we pushed through the top of the channel, a break we have been expecting for a while. But by close, our market gave up roughly half the gains to sit back on the resistance level. With today’s strong open, we will once again push through the top of the channel and provided U.S futures don’t shift from being flat into the red we should stay above it.
The market has seemed to respond well to a Democratic government. This may change depending on what the Biden administration does with tax, with talk of perhaps removing some of Trump’s cuts implemented mid through his presidency. We won’t know until the Biden administration shows its true colors, though don’t be surprised if it is the same shade as those they are replacing.
US shares rose overnight, with Joe Biden being inaugurated as US president. Company earnings reporting was largely positive, with United Health, Procter & Gamble, Morgan Stanley, Fastenal, and many other big names all reporting better than expected profitability.
The only negative overnight was an oil inventory read that showed a build-up in US oil storage. Regardless, every major sector including oil stocks closed higher; technology stocks were by far the strongest, with Netflix rallying more than fifteen percent after a positive earnings report the night before.