Why Stocks Rallied
What’s in Today’s Report:
- Why Stocks Rallied Yesterday
Futures are modestly lower this morning as yesterday’s record highs are digested while more positive vaccine news is being offset by yesterday’s mixed stimulus headlines.
News broke overnight that the U.K. approved Pfizer’s COVID-19 vaccine for emergency use as early as next week, although the market reaction was limited as vaccine hopes are already largely priced in with stocks at or near records.
Economic data was mostly upbeat overnight with German Retail Sales and Eurozone Unemployment both beating estimates however the stimulus stalemate continues to weigh on the global growth outlook right now.
Today, there are two economic reports to watch as the ADP Employment Report (E: 420K) kicks off jobs week while Motor Vehicle Sales (E: 16.1M) will be released later in the morning.
There are multiple Fed speakers today including: Quarles (9:00 a.m. ET), Williams (9:00 a.m. ET & 1:00 p.m. ET), and Powell (10:00 a.m. ET) with the bulk of the focus remaining on the Fed chair’s second day of testimony before Congress.
Bottom line, investors are focused on stimulus right now, underscored by the fact that there was not a more pronounced reaction to the Pfizer vaccine approval news overnight, so until we gain more clarity on the size and scope of the next coronavirus aid package, it may be difficult for stocks to continue to grind to new record highs in the very near term.