Before The Bell - The major indexes have been edging their way higher in February, largely driven by hopes of positive developments on the coronavirus front and the likelihood that the government will pump additional liquidity into the system. Regarding the former, the rollout of vaccines in the U.S. continues to ramp up, and it appears that the majority of U.S. citizens should have access to vaccination by the end of summer. As to the prospects for a new stimulus package, current estimates among economists are hovering not far from the neighborhood of President Biden’s $1.9 proposal. For individuals, key components of the proposed legislation include a new round of relief checks for those in lower income brackets, the extension of unemployment benefits, and additional assistance to households with children. The hope is that government spending will be enough to jump start the economy as things begin to reopen.
As we look to today’s session, stocks began the day in mixed fashion. Markets in Asia were up solidly, but the European bourses are hovering around breakeven. On our shores, the futures are indicating a positive open with the major indexes poised to move further into record territory as we begin the holiday-shortened trading week.
Meanwhile, fourth-quarter earnings season remains in full swing and, so far, results have largely come in better than expected. However, these reports from Corporate America are not likely to be a priority among investors, as attention remains fixed on the pandemic.
In the meantime, on the economic front, Wednesday brings us January’s tallies on retail sales, industrial production and the minutes from the last FOMC meeting. This will be followed on Thursday by the latest figures for housing starts, and building permits, and existing home sales on Friday. – Mario Ferro