The Close: Markets Snap a 4-Day Losing Streak. Possible Christmas Miracle?
We haven't seen much movement within the markets for the last few trading days. The indexes either decrease by a few points or increase by a few points, and there was more of the same today during sessions. This week has felt like one of the most intense and newsworthy weeks in a while, whether it be the stimulus package, Trump claiming he won’t sign off on the package, Fed news, new COVID strain, and vaccine news. We’ve experienced the highs and the lows this week for certain, and hopefully that will change soon. Big vaccination news today as well, the US has officially vaccinated 1 million citizens, yet it’s December goal is to hit a total of 20 million.
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The Dow jumped up above 30,000 again, finishing the session off at +114.32 points, or 0.38%. The S&P 500 jumped a measly 2.75 points, or +0.07%. Finally, the Nasdaq dropped -36.8 points, or -0.29%. As we can see from those metrics, the market essentially did not move much at the close, with the exception of the Dow. Yet, markets were up big during intraday trading, as the Dow was up at 30,292. Why were markets up intraday? We received jobless claims news which was less than expected, yet still increasing each week at substantial levels. Investors loved that news. Markets snapped a 4 day losing streak, amidst the news regarding Trump’s potential refusal to sign off on the new stimulus deal. The sitting President also pardoned 26 individuals including Paul Manafort, Roger Stone, and Charles Kushner just to name a few.
The new stimulus deal will provide American’s with the worst income with a mere $600 which is not going to do much. These Americans may not even have enough, including the stimulus deal income, to even afford rent. Yet, from an economic standpoint this massive package will continue to destroy our dollar. The effects of inflation will be felt soon after the virus has been rid of the world due to an immense amount of money printing provided to us by the Fed. This form of monetary policy we’re seeing here will eventually cause inflation to increase at levels of which the Fed will be uncomfortable with. When this occurs, the Fed will enact restrictive monetary policy, where they tighten their grips on the amount of money circulating throughout the globe. We experienced a time of expansionary monetary policy in the beginning of the pandemic, where the Fed drastically cut interest rates to near zero, and increased money supply by quantitative easing, large scale asset purchasing, etc.
Markets will be open for trading tomorrow, Christmas eve, yet they’re closing early Friday for Christmas day.