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By Nicholas
Jasinski | Monday, December 7 One
Direction. Stock indexes pulled back
modestly today from their record highs set on Friday. The surge in
Covid-19 cases, hospitalizations, and fatalities continues, and more
governments are responding with restrictions on gatherings and economic
activity. Most of
California is under a stay-at-home order, and New York Gov. Andrew
Cuomo warned today that indoor dining could
be further restricted if the state's hospitalization rate fails to stabilize.
States and localities across the nation have imposed limits on
gatherings and certain types of economic activity. Friday's
November jobs report was the latest indicator to show continued improvement
in the economy, but at an anemic pace relative to the ground left to recover.
December appears set to deliver an even greater slowdown. There were
continued rumblings on the fiscal stimulus front over the weekend, but
nothing appears imminent. The latest bipartisan bill has a price tag of
$908 billion, a compromise figure between Democrats’ and Republicans’ earlier
separate proposals. The Dow
Jones Industrial Average closed down 0.5% today,
the S&P 500 lost 0.2%,
and the Nasdaq Composite ticked up
about 0.4%, to a record high. Despite the
gloomy headlines, many investors are finding it hard to be meaningfully
bearish on the market. A Covid-19 vaccine is on the horizon and
companies and consumers are itching for a post-pandemic economy. On top of
that, there's the argument that the worse the economic impact of the fall and
winter virus outbreaks is, the more motivated Congress will be to pass
a stimulus bill. "Under
the circumstances, it is hard to be a seller of any risk asset as long as
there is a good possibility of getting a deal done,” Mizuho
Securities analyst Robert
Yawger wrote late
last week. “You could actually make the argument that bad news is
actually now good news, because it increases the probability of getting a
deal done." A stimulus
package now could tide the economy over until the vaccine has been
widely distributed and the recovery can stand on its own. Either way, the
coldly rational market's focus remains on the other side of the pandemic
despite the grim present. |
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DJIA: -0.49% to 30,069.79 The Hot
Stock: MarketAxess
Holdings +5.7% Best Sector:
Communication Services +0.6%
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