US stock index futures rose slightly in Wednesday morning trading, with the market trying to recover record highs.
Contracts linked to the Dow Jones Industrial Average gained 71 points. The S&P 500 and Nasdaq 100 futures traded in slightly positive territory.
The move came after the main averages closed lower on Tuesday, giving up initial gains that pushed stocks to record highs at the opening bell. Both the Dow and the S&P 500 achieved successive three-day wins, each falling 0.22%. The Nasdaq Composite, in turn, fell 0.38%.
The Russell 2000 closed down 1.85% for the third consecutive negative session.
In Washington, lawmakers continued to disagree about direct payments to Americans. Senate majority leader Mitch McConnell blocked the effort by Senate minority leader Chuck Schumer to speed up the House-approved bill on Monday night that would increase checks from $ 600 to $ 2,000 . Stimulus payments may go out on Tuesday night, said Treasury Secretary Steven Mnuchin.
President Donald Trump supported higher payments and, on Tuesday, said in a tweet that the change should be approved “ASAP. $ 600 IS NOT ENOUGH!”
With only two trading days remaining in the year, the main averages are on track to end 2020 higher. The Dow rose 6.3% in the year, while the S&P 500 gained 15.36%. Despite some recent selling pressure, the Russell 2000 is still up 17.4% for the year.
But the clear winner of the year remains the Nasdaq Composite, which won 43%.
“We expect strong economic growth to resurface in 2021, in the wake of the headwinds of the 2020 pandemic and the 2019 US-China trade war,” said Brian Demain, portfolio manager at Janus Henderson Investors. “Although leadership has so far been limited – mainly limited to the digital economy – we anticipate a broad recovery, as vaccines are widely implemented and consumers are able to re-engage in the physical economy,” he added.
Covid’s number of cases continues to rise. The US is now reporting at least 180,905 new cases and at least 2,210 virus-related deaths each day, based on an average of seven days calculated by CNBC using data from Johns Hopkins University. On Tuesday, the United States confirmed its first case of the fastest-spreading coronavirus strain that was first discovered in the UK
Some investors say that another potential obstacle for stocks looking ahead is the rise in some of the hottest stocks of the year.
Interactive Brokers President Thomas Peterffy said on Tuesday at “Squawk Alley” that an “extraordinarily unusual” thing has happened in the past few days: his customers are out of business for the first time.
“Our customers tend to be on the side of selling options, and there is so much demand for these options out of money that our customers tend to become sellers,” he said. “So, Robinhood people are buying these options, and Interactive Brokers’ customers are buying these options,” he added. In other words, although it is not necessarily a definite bet on the negative side ahead, customers are taking advantage of the high demand on the other side.
Charles Bobrinskoy, vice president of Ariel Investments, reiterated the dangers of a market driven by momentum.
“It cannot be the case that the way to earn by investing is just by buying what has gone up in the past two years,” he said on Tuesday at CNBC’s “Closing Bell”. “It works in dynamic markets. Dynamic markets are wonderful until they change. But when they do, it’s ugly,” he said.
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