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Wall Street follows worst week since October with best week since November

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4 pm: News that Democrats passed a budget resolution seems to have been well received

The Dow closed Tuesday up 92 points, 0.3%, at 31,148, rounding out the index’s best week since November, per CNBC. The Nasdaq Composite gained 79 points, 0.6%, to 13,856, and the S&P 500 picked up 15 points, 0.4%, to end the day at 3,887.

Traders may have priced in optimism about impending stimulus spending after Democrats passed a budget resolution Friday morning, which begins the budget reconciliation process necessary to pass a potentially $1.9 billion Covid-19 relief bill, CNBC reported. Such a bill would likely include $1,400 checks, along with unemployment benefits and funding for testing and vaccines.

12:15 pm: Major indices improve in midday trading

The Dow was up 96 points, 0.3%, to 31,152 at midday. The Nasdaq Composite gained 61 points, 0.5%, 13,839, and the S&P 500 improved 15 points, 0.4%, to 3,887.

“The no-so-hot jobs report has not stopped the Dow Jones as well as the S&P 500 from gaining ground, although the indices are off the highs of the session,” CMC Markets UK analyst David Madden wrote. “Earlier today it was announced the Senate has adopted a measure to fast-track President Biden’s $1.9 trillion stimulus plan so optimism is still in reasonably healthy supply. The jobs update made for interesting reading but the stimulus story is still the big issue of the week.”    

GameStop Corp (NYSE:GME) stock is enjoying a mini rally after losing huge chunks of value earlier this week. Shares are up 16% to $62.18.

10:10 am: Proactive North America headlines:

Silvercorp Metals Inc (NYSEAMERICAN:SVM) (TSE:SVM) (FRA:S9Y) reports upswing in income and revenue in fiscal third quarter

The Valens Company (TSE:VLNS) (OTCQX:VLNCF) (FRA:7LV) lays out operational priorities at its two Cannabis 2.0 manufacturing facilities; updates on LYF acquisition

American Resources Corporation (NASDAQ:AREC) -invested special purpose acquisition company seeks acquisition target for IPO

Canada Silver Cobalt Works Inc (CVE:CCW) (OTCMKTS:CCWOF) (FRA:4T9B) reports high-grade silver assays from sonic drilling at Beaver mine property

Victory Resources Corporation (CSE:VR) (FRA:VR61) (OTCPINK:VRCFF) receives BLM acknowledgement letter as it seeks permit on Loner Property in Nevada

Real Luck Group Ltd (CVE:LUCK) welcomes news of Google Play Store gambling apps in 15 new countries

9:40 am: Wall Street starts ahead

The main indices on Wall Street were in the green in early trading on Friday despite January’s jobs report coming in weaker than expected.

Shortly after the opening bell, the Dow Jones Industrial Average was up 0.56% at 31,229 while the S&P 500 climbed 0.45% to 3,889 and the Nasdaq rose 0.27% to 13,818.

The higher start came as the US jobs market rebounded back to growth last month, with the non-farm payrolls data showing the economy added 49,000 jobs, up from a 140,000 loss in December but just undershooting market estimates of 50,000. The unemployment rate, meanwhile, fell to 6.3% from 6.7%.

Analysts at ING said they hoped the January reading will “mark the low point for 2021 job creation” and that low hospitalisation rates for coronavirus (COVID-19) in the SU and the partial reopening of some states would boost the economic recovery.

“Today’s report is disappointing, but we are optimistic on the outlook for jobs. February’s report should be better given the California re-opening is underway, which means restaurants are operating again (for dine outside) along with hair salons and nail bars in America’s most populous state. We also know that New York restaurants are allowed to re-open for dine-in eating from February 14th (at 25% capacity) so that will show up in the March report”, ING said

“That said, we aren’t going to get meaningful improvements in the labour market until Covid containment measures are lifted on heavily impacted sectors such as travel, leisure and hospitality. That is likely to be several months away so vaccine performance and vaccination rates are critical for the outlook”, they added.

8:02 am: Wall Street to start higher

Stocks in New York are set to finish off what has been a bumper start to February with yet more gains predicted after the opening bell.

The Dow Jones Industrial Average and S&P 500 indices are both set to rise 0.5%, according to pre-market trading, with the tech-powered Nasdaq Composite called 0.4% higher.

GameStop (NYSE:GME), the hot stock of recent weeks, is trading slightly higher in pre-market trades, after collapsing another 42% to US$53.5 overnight.

Ford Motor Co (NYSE:F) is also seen clicking up a gear after a bullish earnings report overnight, where it also took the fight to Tesla (NASDAQ:TSLA) with aggressive investment plans for electric and autonomous vehicles.

Traders eyes will soon be turned to the non-farm payrolls report as the big data point of the day, if not the month.

Roughly 50,000 jobs are forecast to have been created last month, compared with a decline of 140,000 in December, with the unemployment rate remaining at 6.7%.

Investors will also have one eye on what’s happening in Washington, said market analyst Craig Erlam at Oanda, with the Democrats appearing to be making good progress on a US$1.9trn stimulus package.

“This week has been just what the doctor ordered after weeks of unease and growing anxiety in the markets,” said Erlam.

“Whether driven by the Reddit rebellion, a lack of trust in the Fed to not intervene too soon in the recovery or just a normal corrective move following a powerful run in uncertain times. Whatever the cause, investors will be going into the weekend somewhat relieved.”

However, he added: “We’re not out of the woods yet. There’s every chance we could see stocks turn south again next week but it’s always good to get a week like this under your belt after a difficult period. And there is reason to be a little more optimistic.

“After weeks of lockdown, numerous countries have turned a corner and every passing week of the vaccine rollout is one closer to being able to leave the house for something more than a jog. I’ve even found myself looking forward to getting the tube again; I can only imagine what the summer is going to be like as everyone breaks free.”

Four things to watch for on Friday:

  • Companies delivering earnings at the end of the week include engineer group Illinois Tool Works Inc (NYSE:ITW), biotech firm Regeneron Pharmaceuticals Inc (NASDAQ:REGN) and healthcare services group Cardinal Health Inc (NYSE:CAH)
  • Aside from payroll data, other macro info due to be released today include average US hourly earnings for January as well as import and export data for December
  • Meanwhile, investors may also be keeping an eye on shares in electronics firm Koss Corp (NASDAQ:KOSS), which has found itself as another beneficiary of last week’s Reddit inspired trading frenzy that originally lit a fire under shares in GameStop Corp (NYSE:GME)
  • Politics is also likely to be in focus as Democrats in Washington DC kick off plans to pass president Biden’s US$1.9 trillion stimulus plan without Republican support

Story by ProactiveInvestors


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