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By Nicholas
Jasinski | Thursday, December 17 Records. The four
major U.S. indexes all closed at all-time highs today, but the most
significant news of the day came after the closing bell. An advisory panel of
medical experts convened by the Food and
Drug Administration recommended approving Moderna's Covid-19
vaccine, setting up an emergency use authorization as soon as tomorrow. That
could add tens of millions of additional doses in just the coming weeks,
without some of the supply chain headaches associated with the Pfizer/BioNTech vaccine's
need to be stored at ultra-cold temperatures. Bill Alpert has an
excellent report summarizing all the latest developments on the
Covid-19 vaccine front. He also walks through what needs to happen for the
vaccines to progress from emergency authorizations to full licensing,
and why that distinction matters. The path of
least resistance for the market remains upward: The Dow
Jones Industrial Average rose 0.5% today, the S&P
500 gained 0.6%, the Nasdaq
Composite added 0.8%, and the Russell
2000 climbed 1.3%. All four closed at record
highs. Other than
the continued vaccine-driven optimism, the apparent progress toward
a stimulus package from Congress has lifted Wall Street's spirits. If
all goes smoothly, that too could be wrapped up by tomorrow. Christmas might
just come early this year for investors. Democratic
and Republican leaders are reportedly
close to an agreement on a fiscal stimulus and coronavirus relief
bill with a price tag of about $900 billion. It would include funding for
vaccine distribution, another round of direct payments to individuals of
about $600, supplemental unemployment benefits, and more than $300 billion in
small business relief. State and
local government budget support and liability protections are not in the
package. Congress also needs to pass a bill to keep the government open
before it leaves for the holidays at the end of the week. Elsewhere in
markets today, a larger-than-expected U.S. inventory draw helped lift
oil prices to a nine-month high. West
Texas Intermediate futures settled at more than $48 a
barrel today for the first time since February. The crude
boost was also helped by the optimism over a stimulus bill, and by a steadily
weakening dollar. Commodities priced in the currency—like oil, gold, or lean
hogs—are worth more dollars when the value of the dollar declines. The U.S.
Dollar Index (DXY) fell below 90 for first time
today since April 2018. Commonly referred to as the "Dixie,"
it measures the dollar against a basket of other currencies. After spiking
during February's and March's market turmoil, the index has declined
steadily since as investors moved back into risk assets. The Dixie's
latest leg down came after the Federal
Reserve's promise yesterday to
keep monetary policy ultra-easy even as the U.S. economy improves. That could
mean some greater inflation down the line, decreasing the value of the
dollar. |
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DJIA: +0.49% to 30,303.37 The Hot
Stock: Lennar +16.1% Best Sector:
Real Estate +1.2% |
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