Stock futures soared at the end of Thursday’s trading session, while traders considered the details of President-elect Joe Biden’s recently revealed stimulus proposal and weighed the likelihood that the package would move quickly through Congress.
The contracts for the three main indices were traded just above the flat line on Thursday night, preventing falls during the normal trading day. Both the Dow and Nasdaq reached record intraday highs before closing low.
Biden outlined his $ 1.9 trillion coronavirus relief proposal on Thursday, which included a series of additional relief measures to add to the provisions included in the $ 900 billion package approved by Congress in December.
Biden’s proposal, called the American Rescue Plan, aims to offer stimuli of $ 1,400 to most Americans, increase federal unemployment benefits by $ 100 to $ 400 a week and extend them until the end of September, and provide $ 350 billion in aid to state and local governments, which had been excluded from the last Congressional package. It also seeks to raise the minimum wage to $ 15 an hour and provide additional funds for schools and to increase testing and vaccination COVID-19, among other measures.
The overall size of the package was largely in line with what investors were anticipating from the proposal, and would only be rivaled by the $ 2.2 trillion relief from the CARES Act last spring. Whether the package will really move forward in the short term is the next key question for the markets, some experts noted.
“We need to distinguish between will and ability. I have no doubt that the new Biden government wants to grow. They want to excel in relief, in infrastructure, in local and state governments, and for good reason, ”said Mohamed El-Erian, president of Queens College at Cambridge University and chief economic advisor to Allianz told Yahoo Finance on Thursday. . “But they have a tenuous majority in Congress and a tenuous one in the Senate. And doing that is not going to be easy. In addition, there are questions about the impeachment process, there are questions about appointments, there are COVID.
“So, the market, I think, has priced in a big package. This is consistent with what the Biden government wants to do. The question that the market will have to face is whether it will be able to do so, given what else the Senate will have to look at in the coming weeks and months, ”he added.
Still, support for the financial markets and the economy came from several fronts during the pandemic, and many members of the Federal Reserve, for their part, have recently doubled their commitment to keeping crisis-era policies in place for now. Fed Chairman Jerome Powell said during a webinar on Thursday that he believes the US economy is still “far from our goals” and that “now is not the time to talk about exit” when it comes to considering the Fed thinking around pandemic-era asset buying program.
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18:01 ET Thursday: Stock futures open higher
Here are the main movements in the markets, starting at 6:03 pm ET Thursday:
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S&P 500 Futures (ES = F): 3,794.75, an increase of 3.5 points or 0.09%
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Dow Futures (YM = F): 30,932.00, up to 23 points or 0.07%
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Nasdaq Futures (NQ = F): 12,918.75, up 17.75 points or 0.14%
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