U.S. Stock Market

Stocks Move Higher On Stimulus Expectations

U.S. Congress Certifies Biden Win

S&P 500 futures are gaining ground in premarket trading as traders managed to shrug off concerns about yesterday’s unrest in Washington. The U.S. Congress promptly certified Joe Biden’s victory in presidential election.

U.S. President Donald Trump stated that “there will be an orderly transition on January 20th”, and markets focused on the consequences of Democrats’ victories in Senate elections.

Traders expect that Democrats will soon introduce another stimulus package which should provide additional support to the economy and the stock market. The yields on U.S. government bonds continued to rally as investors sold their holdings in anticipation of another avalanche of freshly-printed dollars.

Surprisingly, the U.S. dollar gained some upside momentum against a broad basket of currencies, putting pressure on safe-haven precious metals like gold and silver. It remains to be seen whether the U.S. dollar will continue to rebound as stimulus expectations will likely serve as a bearish catalyst for the American currency.

U.S. – China Tensions Continue To Increase

According to recent reports, U.S. may add China’s tech giants Alibaba and Tencent to a blacklist, banning American investments in these companies. On Tuesday, the U.S. ordered a ban on transactions with eight Chinese apps.

In addition, Secretary of State Mike Pompeo stated that the U.S. may introduce new sanctions related to the recent arrests in Hong Kong.

The new escalation in U.S. – China tensions did not get much attention as traders watched the turmoil in Washington, but it may have longer-term implications, especially in case the U.S. bans Chinese tech giants from U.S. markets. At this point, the markets ignore the risks of another round of trade war between the world’s biggest economies, and stocks look ready to move to new highs.

Initial Jobless Claims Remain Unchanged At 787,000

The U.S. has just provided Initial Jobless Claims and Continuing Jobless Claims reports.

The Initial Jobless Claims report indicated that 787,000 Americans filed for unemployment benefits in a week compared to analyst consensus of 800,000. Meanwhile, Continuing Jobless Claims declined from 5.22 million to 5.07 million.

These reports look good in comparison with yesterday’s ADP Employment Change report which showed that private businesses fired 123,000 workers in December. However, traders will wait for the Non Farm Payrolls report which will be published on Friday to come to final conclusions about the current state of the job market.

For a look at all of today’s economic events, check out our economic calendar.