Medicare Agent News: Taking a Breather

Friday, January 22, 2021

Taking a Breather

By Nicholas Jasinski | Thursday, January 21

On Hold. Stock indexes hovered around the break-even line today, coming off their record highs from yesterday. For the third-straight session, growth areas of the market led more cyclical and value pockets.

The S&P 500 closed up less than 0.1% and the Nasdaq Composite gained 0.5%, both enough for fresh all-time highs. The Dow Jones Industrial Average, meanwhile, slipped 12 points, or less than 0.1%, and the Russell 2000 fell 0.9% from their record highs set yesterday.

Investors were focused on the latest earnings reports and economic data out today. U.S. initial jobless claims fell to 900,000 for the week ended Jan. 16, below forecasts for 925,000 and down from a revised 926,000 in the previous week. That compares with a pandemic-era low of about 700,000 in November, and is a multiple of the then-record initial claims figure from before 2020.

December housing starts were exceptionally strong, led by a 12% jump in single-family starts, while multifamily declined slightly. The overall figure in December came in at an annualized pace of 1.669 million units, its highest since 2006.

“Builders are doing their best to catch up to a massive upswing in demand that was heightened by the pandemic,” Amherst Pierpont chief economist Stephen Stanley wrote today. “They appear to be making progress, but the market for new homes will undoubtedly remain tight for the foreseeable future.”

President Joe Biden enacted numerous additional executive orders on his second day in office, focused on fighting the Covid-19 pandemic. The measures include a mask mandate on interstate travelers using public forms of transportation, a 14-day quarantine requirement for international arrivals, and a larger role for the federal government in collecting data on Covid-19 cases, hospitalizations, and vaccinations. Biden also invoked the Defense Production Act to ramp up supply of medical equipment, testing materials, and PPE.

Whatever helps put the pandemic behind us sooner is a net positive for the stock market and for all Americans. But compared with a dozen executive orders, a much bigger impact for the economy will come from the $1.9 trillion fiscal stimulus proposal the Biden administration is trying to get through a narrowly divided U.S. Senate. Reports today suggested that the package was facing resistance among Republicans, and that the administration may need to lower the price tag to secure bipartisan support.

Even if the Biden plan came in at only half its proposed size, it would still amount to some 5% of U.S. GDP this year. And that's before any promised infrastructure spending, which could reach into the trillions of dollars as well.

There's still a lot more stimulus coming. Stocks at record highs reflect that.