Investment Commentary – December 22nd, 2020
Year to Date Market Indices as of December 22nd, 2020
• Dow 30,216 (5.88%)
• S&P 3,694 (14.37%)
• NASDAQ 12,742 (42.02%)
• Gold $1,882 (23.83%)
• OIL $47.57 (-22.74%)
• Barclay Bond Aggregate (4.82%)
• Fed Funds Rate 0-0.25 (0-0.25)
Americans will get stimulus checks as soon as next week, Mnuchin says
Treasury Secretary Steven Mnuchin spoke in a CNBC interview ahead of Congress’ expected vote to pass the $900 billion Covid-19 relief bill.
“This is a very, very fast way of getting money into the economy. Let me emphasize: People are going to see this money at the beginning of next week,” he said.
Treasury Secretary Steven Mnuchin told CNBC on Monday that Americans who qualify for direct payments in new Covid relief legislation could see that money hit their bank accounts in a matter of days.
“The good news is this is a very, very fast way of getting money into the economy. Let me emphasize: People are going to see this money at the beginning of next week,” Mnuchin told CNBC host Jim Cramer.
“So it’s very fast, it’s money that gets recirculated in the economy,” he added. “People go out and spend this money, and that helps small business and that helps getting more people back to work.”
Mnuchin’s comments came hours before Congress’ expected vote to approve the $900 billion Covid-19 relief bill. The latest bill includes provisions akin to those in the original CARES Act, the $2.2 trillion relief package approved in March.
Individuals including children will receive $600 in direct payments. A family of four could end up with $2,400. The payments decrease for people who made more than $75,000 during 2019. They would phase out completely for people who made above $99,000 that year.
Democrats said the bill would put $284 billion into Paycheck Protection Program small business loans. The new bill would also direct another $20 billion to small business grants and $15 billion to live event venues.
If passed, the legislation would include a $300 federal weekly unemployment supplement and temporarily keep in place pandemic-era programs that expanded unemployment insurance eligibility.
The Treasury secretary had earlier in the year led negotiations with top Democrats to reach a new stimulus deal. After the 2020 elections, Senate Republicans led by Majority Leader Mitch McConnell took over the deliberations.
European stocks higher despite concerns over new coronavirus strain
The pan-European Stoxx 600 traded 0.7% higher, with Germany’s DAX and France’s CAC indexes rising around 0.9% and 0.8% respectively.
European markets came under heavy selling pressure Monday amid concerns over a fast-spreading Covid mutation.
U.K. GDP grew by a record 16% in the third quarter, data showed, but that didn’t make up for an 18.8% decline the previous quarter.
LONDON — European shares were higher Tuesday morning, attempting to recover from a brutal sell-off in the previous session, despite concerns over a new coronavirus strain in the U.K.
The pan-European Stoxx 600 traded 0.7% higher, with Germany’s DAX and France’s CAC indexes rising around 0.9% and 0.8% respectively. Britain’s FTSE 100 rose 0.2% after initially falling. Banking stocks were the top gainers, up 1.2%, with Barclays and Lloyds both climbing nearly 3% to lead the sector.
European markets came under heavy selling pressure Monday amid concerns over a fast-spreading Covid mutation that was first identified in Britain. The new variant forced the U.K. government to shut down London and other parts of southeast England and backtrack on the mixing of households over the Christmas break.
The variant, which scientists say is up to 70% more transmissible than previous strains in the U.K., has also been identified in Italy, Netherlands, Belgium, Denmark and Australia. It has caused multiple countries around the world to shut their borders to Britain, disrupting travel and raising concerns over potential food shortages as the Brexit transition deadline nears.
Meanwhile, the U.K. and EU remain deadlocked over post-Brexit trade relations as the Dec. 31 deadline approaches, with disputes over issues such as fisheries plaguing talks. British Prime Minister Boris Johnson said Monday that the country could still crash out without a deal.
“The position is unchanged, there are problems,” British Prime Minister Boris Johnson told reporters Monday. “It’s vital that everybody understands that the U.K. has got to be able to control its own laws completely and also that we’ve got to be able to control our own fisheries.”
“It remains the case that WTO terms would be more than satisfactory for the U.K. and we can certainly cope with any difficulties that are thrown in our way.”
Sterling extended Monday’s losses on Tuesday, falling another 0.5% to around $1.34.
Official data showed U.K. GDP grew by a record 16% in the third quarter, but that still didn’t make up for an 18.8% decline in the previous quarter when much of the economy was shut down.
WHEN DOES THE STOCK MARKET CLOSE FOR HOLIDAYS?
There are a number of special rules that dictate when certain holidays are celebrated by financial markets and under what circumstances the stock market will be closed:
- The day after Thanksgiving is not an official holiday. However, Wall Street has a tradition of closing at 1:00 PM on that Friday.
- The day before Independence Day (July 3rd) is not an official holiday. However, the stock market has a tradition of closing at 1:00 PM on that day.
- When a stock market holiday falls on a Saturday, the market will be closed on the preceding Friday.
- When a stock market holiday falls on a Sunday, the market will be closed on the following Monday.
- Martin Luther King, Jr. Day is always celebrated on the third Monday in January.
- Washington’s Birthday, also referred to as Presidents Day, is celebrated on the third Monday in February.
- Good Friday is celebrated on the Friday before Easter Sunday.
- Memorial Day is celebrated on the last Monday in May.
- Labor Day is celebrated on the first Monday in September.
- Thanksgiving is celebrated on the fourth Thursday in November.
- The stock market closes at 1:00 PM Eastern on Christmas Eve and remains closed on Christmas Day.
- The stock market remains open on some federal holidays, bank holidays and religious celebrations, including Columbus Day, Veterans Day, Election Day, Easter Monday, Rosh Hashanah, Yom Kippur, and Boxing Day.
- The stock market can close for reasons other than holidays, such as extreme weather events, terrorist attacks, and major technical issues with an exchange’s trading platform.
Around the Web
Small-cap rally: Small-cap stocks outperformed their large-cap peers by a wide margin, as the Russell 2000 Index, a small-cap benchmark, climbed around 3% for the week. The gain left the index just 30 points shy of the 2,000-point level, a threshold that the Russell 2000 has never before crossed.
Buyback rebound: Stock buyback activity rose nearly 15% in the third quarter compared with this year’s second quarter, when the impact of the pandemic weighed on share repurchases. Buybacks at companies in the S&P 500 rose to nearly $102 billion, according to S&P Dow Jones Indices, which expects a further increase in the fourth quarter.
Fed’s bond buying: The U.S. Federal Reserve Board kept interest rates unchanged while committing to continue buying about $120 billion in government bonds each month to help fuel economic recovery. In its latest policy statement, the central bank explicitly tied its bond-buying program to its goals of full employment and stable inflation.
Thursday: Weekly unemployment claims, U.S. Department of Labor
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