U.S. stock index futures soared in Sunday morning trading, with the main averages appearing to accelerate gains after the best week since November.
Futures contracts linked to Dow gained 75 points, or 0.27%. S&P 500 futures were up 0.3%, while Nasdaq 100 futures were up 0.33%.
The S&P 500 closed at a record high on Friday and posted its fifth consecutive positive session for the first time since August. The Dow Jones is also on its longest daily winning streak since August, while the Nasdaq Composite recorded its fourth positive session out of five on Friday. The high-tech index also closed at a record high.
“We are still in a bull market in the early stages of an economic recovery that is gaining momentum,” said Michael Wilson, chief stock strategist at Morgan Stanley, in a note to clients on Sunday. “We continue to recommend stocks with the greatest potential for a scenario of economic improvement as vaccines are distributed and normal activities are resumed,” he added.
All three major averages ended the week in green, with each showing its best week since November, as fears of a squeeze in a handful of stocks leading to wider market contagion eased. The Russell 2000, meanwhile, is on its longest daily winning streak since May, and gained 7.7% last week for its best weekly performance since June.
“Shares continue to rise and are likely to reach the 4000 level for the S&P 500,” said JC O’Hara, chief market technician at MKM Partners. “The trends remain positive … The severity of the rise is expected to continue to attract quick cash, but in the long run, patient cash will remain on the sidelines until a retraction occurs,” he added.
The Senate and House passed a budget resolution on Friday, starting the reconciliation process that would allow President Joe Biden’s $ 1.9 trillion bailout package to pass the Democratic-controlled Senate with a simple majority.
The package includes $ 1,400 stimulus checks, additional unemployment benefits, Covid-19 vaccine and test funds.
Treasury Secretary Janet Yellen said on Sunday that if Biden’s stimulus plan is approved, the United States could return to full employment in 2022.
“There is absolutely no reason for us to suffer from a long, slow recovery,” Yellen said during an interview on CNN’s “State of the Union”. “I would hope that, if this package were approved, we would return to full employment next year.”
Meanwhile, another busy profit week is underway, with 78 components of the S&P 500 set to report quarterly results. Among the names on display are Cisco, Twitter, Yelp, Uber, MGM, Mattel, GM, Coca-Cola and Disney.
In front of the coronavirus, more contagious variants continue to spread across the United States. On Friday, Virginia health officials reported the first case of the strain state first identified in South Africa. On Sunday, South Africa suspended the distribution of the AstraZeneca vaccine due to its minimal effectiveness against the identified strain for the first time in the country.
In the United States, the launch of the vaccine continues. “The boots on site are becoming increasingly efficient in delivering the vaccine and the positive test data has increased hope that a third vaccine will be available soon for emergency use,” noted Ryan Detrick, chief market strategist from LPL Financial. “Obviously, as a larger proportion of the population receives their vaccines, economic activity can recover and hiring for the most affected services can resume.”
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