fundamental News - SP500
S&P 500 and Dow higher while the Nasdaq sank as tech stocks came under renewed pressure. Energy stocks the laggards throughout 2020 jumped on Tuesday as crude oil prices rose above $53 per barrel to a 10-month high. And the 10-year Treasury yield, which had languished below 1% for most of last year, also held near its highest level since March.
With the S&P 500 just 0.6% below its recent all-time closing
high, investors have largely looked through the recent political turmoil
in Washington, D.C. The House of Representatives is preparing to vote
as soon as Wednesday over whether to impeach President
Donald Trump for a second time during his presidency for “incitement of
insurrection” after last week’s riots at the U.S. Capitol. Any
impeachment proceedings, however, could pull focus away from
President-elect Joe Biden’s agenda in his first days in office
and importantly for markets, potentially impact the timeline for the
passage of another stimulus package, some strategists noted.
“I think Joe Biden deep down in he might not say this in public but
I think deep down in he’s thinking, do I really need this kind of
distraction?” Greg Valliere, AGF Investments chief policy strategist,
told Yahoo Finance on Tuesday. “He has to get his
entire cabinet confirmed, he wants to move quickly on a stimulus bill,
we’ve got COVID, he has regulations he may want to undo. So I think that
an impeachment fight would be a huge distraction for Biden.”
Strategists and traders have overwhelmingly assumed that another
large stimulus package will come about under the Biden administration
and unified Democratic government. These prospects, along with the
Federal Reserve’s still very easy accommodative monetary
policy posturing, have helped buoy equities even given the ongoing
pandemic and slow vaccine roll-out to date. On Tuesday alone, both St.
Louis Fed President James Bullard and Boston Fed President Eric
Rosengren said in separate public remarks that they believed
it was too soon to even begin talking about shrinking the size of the
central bank’s asset purchases, which are currently taking place at a
$120 billion monthly pace.
“We’re looking at a market that’s never seen this amount of
stimulus before, that’s never seen low rates for years on top of fiscal
stimulus, on top of $120 billion of QE [quantitative easing], on top of
more stimulus,” Tom Essaye, founder Sevens Report
Research, told Yahoo Finance on Tuesday. “There is a positive story in
stocks and right now that’s pushing markets higher. The problem of
course is what if something goes wrong, but that’s not something the
market’s interested in right now.”